As filed with the Securities and Exchange Commission
on April 11, 2017



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549










FORM 20-F












| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------



OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December
31, 2016



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------



Date of event requiring this shell
company report ________________



For the transition period from ___________
to ___________



Commission
file number 001-34985



Globus Maritime Limited

(Exact name of Registrant as Specified in its
Charter)



Not Applicable

(Translation of Registrant’s name into
English)



Republic of the Marshall Islands

(Jurisdiction of Incorporation or Organization)



128 Vouliagmenis Ave., 3rd Floor, 166 74
Glyfada, Athens, Greece

(Address of Principal Executive Offices)



Athanasios Feidakis

128 Vouliagmenis Avenue, 3rd Floor

166 74 Glyfada, Athens, Greece

Tel: +30 210 960 8300

Facsimile:   +30 210 960 8359

(Name, Telephone, E-mail and/or Facsimile Number
and Address of Company Contact Person)



Securities registered or to be registered pursuant
to Section 12(b) of the Act.



|Title of Each Class                       |  | Name of Each Exchange On Which Registered
|----------------------------------------- |  | -----------------------------------------
|Common Shares, par value $0.004 per share |  | Nasdaq Capital Market                    



Securities registered or to be registered pursuant
to Section 12(g) of the Act.



None

(Title of Class)



Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.











None

(Title of Class)



Indicate the number of
outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the
annual report.



As of December 31, 2016, there
were 2,627,674 shares of the registrant’s Common Shares outstanding.



Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.



 ̈
Yes x No



If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.



 ̈
Yes x No



Note – Checking the box above will not
relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their
obligations under those Sections.



Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.



x
Yes  ̈ No



Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). N/A

 ̈
Yes  ̈ No



Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):



|Large accelerated filer  ̈ | Accelerated filer  ̈ | Non-accelerated filer x
|------------------------- | ------------------- | -----------------------



Indicate by check mark which basis
of accounting the registrant has used to prepare the financial statements included in this filling:



|U.S. GAAP   ̈ | International Financial Reporting Standards as issued | Other  ̈
|------------ | ----------------------------------------------------- | -------
|             | by the International Accounting Standards Board x     |        



If “Other”
has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow. N/A

 ̈
Item 17      ̈ Item 18



If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ̈
Yes x No



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark
whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. N/A

 ̈
Yes  ̈ No











TABLE OF CONTENTS



|CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 3                                                                           
|---------------------------------------------------- | ----------------------------------------------------------------------------
|PART I                                               |                                                                             
|Item 1.                                              | Identity of Directors, Senior Management and Advisers                       
|Item 2.                                              | Offer Statistics and Expected Timetable                                     
|Item 3.                                              | Key Information                                                             
|Item 4.                                              | Information on the Company                                                  
|Item 4A.                                             | History and Development of the Company                                      
|Item 5.                                              | Operating and Financial Review and Prospects                                
|Item 6.                                              | Directors, Senior Management and Employees                                  
|Item 7.                                              | Major Shareholders and Related Party Transactions                           
|Item 8.                                              | Financial Information                                                       
|Item 9.                                              | The Offer and Listing                                                       
|Item 10.                                             | Additional Information                                                      
|Item 11.                                             | Quantitative and Qualitative Disclosures About Market Risk                  
|Item 12.                                             | Description of Securities Other than Equity Securities                      
|PART II                                              |                                                                             
|Item 13.                                             | Defaults, Dividend Arrearages and Delinquencies                             
|Item 14.                                             | Material Modifications to the Rights of Security Holders and Use of Proceeds
|Item 15.                                             | Controls and Procedures                                                     
|Item 16A.                                            | Audit Committee Financial Expert                                            
|Item 16B.                                            | Code of Ethics                                                              
|Item 16C.                                            | Principal Accountant Fees and Services                                      
|Item 16D.                                            | Exemptions from the Listing Standards for Audit Committees                  
|Item 16E.                                            | Purchases of Equity Securities by the Issuer and Affiliated Purchasers      
|Item 16F.                                            | Change in Registrant’s Certifying Accountant                                
|Item 16G.                                            | Corporate Governance                                                        
|Item 16H.                                            | Mining Safety Disclosure                                                    
|PART III                                             |                                                                             
|Item 17.                                             | Financial Statements                                                        
|Item 18.                                             | Financial Statements                                                        
|Item 19.                                             | Exhibits                                                                    
|                                                     |                                                                             
|INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS       | F-1                                                                         



2







CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS



This annual report on Form 20-F contains forward-looking
statements and information within the meaning of U.S. securities laws, and Globus Maritime Limited desires to take advantage of
the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation.



The “Company,” “Globus,”
“Globus Maritime,” “we,” “our” and “us” refer to Globus Maritime Limited and its
subsidiaries, unless the context otherwise requires.



Forward-looking statements provide our current
expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans,
objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions.
Forward-looking statements and information can generally be identified by the use of forward-looking terminology or words, such
as “anticipate,” “approximately,” “believe,” “continue,” “estimate,”
“expect,” “forecast,” “intend,” “may,” “ongoing,” “pending,”
“perceive,” “plan,” “potential,” “predict,” “project,” “seeks,”
“should,” “views” or similar words or phrases or variations thereon, or the negatives of those words or
phrases, or statements that events, conditions or results “can,” “will,” “may,” “must,”
“would,” “could” or “should” occur or be achieved and similar expressions in connection with
any discussion, expectation or projection of future operating or financial performance, costs, regulations, events or trends. The
absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements and information
are based on management’s current expectations and assumptions, which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict.



Without limiting the generality of the foregoing,
all statements in this annual report on Form 20-F concerning or relating to estimated and projected earnings, margins, costs, expenses,
expenditures, cash flows, growth rates, future financial results and liquidity are forward-looking statements. In addition, we,
through our senior management, from time to time may make forward-looking public statements concerning our expected future operations
and performance and other developments. Such forward-looking statements are necessarily estimates reflecting our best judgment
based upon current information and involve a number of risks and uncertainties. Other factors may affect the accuracy of these
forward-looking statements and our actual results may differ materially from the results anticipated in these forward-looking statements.
While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated
by us may include, but are not limited to, those factors and conditions described under “Item 3.D.  Risk Factors”
as well as general conditions in the economy, dry bulk industry and capital markets. We undertake no obligation to revise any forward-looking
statement to reflect circumstances or events after the date of this annual report on Form 20-F or to reflect the occurrence of
unanticipated events or new information, other than any obligation to disclose material information under applicable securities
laws. Forward-looking statements appear in a number of places in this annual report on Form 20-F including, without limitation,
in the sections entitled “Item 5.  Operating and Financial Review and Prospects,” “Item 4.A.  History
and Development of the Company” and “Item 8.A.  Consolidated Statements and Other Financial Information—Dividend
Policy.”



Terms Used in this Annual Report on Form
20-F



References to our common shares are references
to Globus Maritime Limited’s registered common shares, par value $0.004 per share, or, as applicable, the ordinary shares
of Globus Maritime Limited prior to our redomiciliation into the Marshall Islands on November 24, 2010.



References to our Class B shares are references
to Globus Maritime Limited’s registered Class B shares, par value $0.001 per share, none of which are currently outstanding.
We refer to both our common shares and Class B shares as our shares. References to our shareholders are references to the holders
of our common shares and Class B shares. References to our Series A Preferred Shares are references to our shares of Series A preferred
stock, par value $0.001 per share, 2,567 of which were outstanding as of December 31, 2015 and none of which were outstanding on
December 31, 2016 and on the date of this annual report on Form 20-F.



On July 29, 2010, we effected
a four-for-one reverse split of our common shares. On October 20, 2016, we effected a four-for-one reverse stock split which reduced
the number of our outstanding common shares from 10,510,741 to 2,627,674 shares (adjustments were made based on fractional shares).
Unless otherwise noted, all historical share numbers and per share amounts in this annual report on Form 20-F have been adjusted
to give effect to these reverse splits.



3







Unless otherwise indicated, all references
to “dollars” and “$” in this annual report on Form 20-F are to, and amounts are presented in, U.S. dollars.
References to our ships, our vessels or out fleet relates to the ships that we own, unless context otherwise requires.



Rounding



Certain financial information has been rounded,
and, as a result, certain totals shown in this annual report on Form 20-F may not equal the arithmetic sum of the figures that
should otherwise aggregate to those totals.



4







PART I



Item 1.  Identity of Directors,
Senior Management and Advisers



Not Applicable.



Item 2.  Offer Statistics and
Expected Timetable



Not Applicable.



Item 3.  Key Information



A.  Selected
Financial Data



The following tables set forth our selected
consolidated financial and operating data. The summary consolidated financial data as of and for the years ended December 31, 2016,
2015, 2014, 2013 and 2012 are derived from our audited consolidated financial statements, which have been prepared in accordance
with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.
The data set forth below should be read in conjunction with “Item 5.  Operating and Financial Review and Prospects”
and our audited consolidated financial statements, related notes and other financial information included elsewhere in this annual
report on Form 20-F. Results of operations in any period are not necessarily indicative of results in any future period.





|                                                               |  | Year Ended December 31,(Expressed
    in Thousands of U.S. Dollars, except per share data) |          
|-------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------ | ---------
|                                                               |  | 2016                                                                                       |          
|Consolidated Statement of comprehensive loss/income            |  |                                                                                            |          
|Voyage revenues                                                |  |                                                                                            | 8,740    
|Management fee income                                          |  |                                                                                            | 278      
|Total Revenues                                                 |  |                                                                                            | 9,018    
|                                                               |  |                                                                                            |          
|Voyage expenses                                                |  |                                                                                            | (1,271   
|Vessel operating expenses                                      |  |                                                                                            | (8,688   
|Depreciation                                                   |  |                                                                                            | (5,014   
|Depreciation of drydocking costs                               |  |                                                                                            | (1,005   
|Amortization of fair value of time charter attached to vessels |  |                                                                                            | -        
|Administrative expenses                                        |  |                                                                                            | (2,094   
|Administrative expenses payable to related parties             |  |                                                                                            | (351     
|Share-based payments                                           |  |                                                                                            | (50      
|(Impairment Loss)/Reversal of impairment                       |  |                                                                                            | -        
|Gain from sale of subsidiary                                   |  |                                                                                            | 2,257    
|Other (expenses)/income, net                                   |  |                                                                                            | (30      
|Operating (loss)/profit before financing activities            |  |                                                                                            | (7,228   
|                                                               |  |                                                                                            |          
|Interest income                                                |  |                                                                                            | 5        
|Interest expense and finance costs                             |  |                                                                                            | (2,676   
|Gain on derivative financial instruments                       |  |                                                                                            | -        
|Foreign exchange gains/(losses), net                           |  |                                                                                            | 74       
|                                                               |  |                                                                                            |          
|Total comprehensive (loss)/income for the year                 |  |                                                                                            | (9,825   
|                                                               |  |                                                                                            |          
|Basic earnings/(loss) per share for the year                   |  |                                                                                            | (3.77    
|Diluted earnings/(loss) per share for the year                 |  |                                                                                            | (3.77    
|Weighted average number of common shares, basic                |  |                                                                                            | 2,603,835
|Weighted average number of common shares, diluted              |  |                                                                                            | 2,603,835
|Dividends declared per common share                            |  |                                                                                            | -        
|Dividends declared per Series A Preferred Share                |  |                                                                                            | -        
|Adjusted (LBITDA)/EBITDA(1) (unaudited)                        |  |                                                                                            | (3,466   



5







(1) Adjusted (LBITDA)/EBITDA
represents net earnings before interest and finance costs net, gains or losses from the change in fair value of derivative financial
instruments, foreign exchange gains or losses, income taxes, depreciation, depreciation of drydocking costs, amortization of fair
value of time charter attached to vessels, impairment and gains or losses from sale of vessels. Adjusted (LBITDA)/EBITDA does not
represent and should not be considered as an alternative to total comprehensive income/(loss) or cash generated from operations,
as determined by IFRS, and our calculation of Adjusted (LBITDA)/EBITDA may not be comparable to that reported by other companies.
Adjusted (LBITDA)/EBITDA is not a recognized measurement under IFRS.



Adjusted (LBITDA)/EBITDA is included herein
because it is a basis upon which we assess our financial performance and because we believe that it presents useful information
to investors regarding a company’s ability to service and/or incur indebtedness and it is frequently used by securities analysts,
investors and other interested parties in the evaluation of companies in our industry.



Adjusted (LBITDA)/EBITDA has limitations
as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported
under IFRS. Some of these limitations are:



| | Ø | Adjusted (LBITDA)/EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Adjusted (LBITDA)/EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Adjusted (LBITDA)/EBITDA does not reflect changes in or cash requirements for our working capital needs; and
| | - | ------------------------------------------------------------------------------------------------------------



| | Ø | other companies in our industry may calculate Adjusted (LBITDA)/EBITDA differently than we do, limiting its usefulness as a comparative measure.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



Because of these limitations, Adjusted (LBITDA)/EBITDA
should not be considered a measure of discretionary cash available to us to invest in the growth of our business.



6







The following table sets forth a reconciliation
of Adjusted (LBITDA)/EBITDA (unaudited) to total comprehensive (loss)/income for the periods presented:



|                                                               |  | Year Ended December 31,                  |       
|-------------------------------------------------------------- |  | ---------------------------------------- | ------
|                                                               |  | (Expressed in Thousands of U.S. Dollars) |       
|                                                               |  | 2016                                     |       
|Total comprehensive (loss)/income for the year                 |  |                                          | (9,825
|Interest and finance costs, net                                |  |                                          | 2,671 
|(Gain)/loss on derivative financial instruments                |  |                                          | -     
|Foreign exchange (gains)/losses, net                           |  |                                          | (74   
|Depreciation                                                   |  |                                          | 5,014 
|Depreciation of drydocking costs                               |  |                                          | 1,005 
|Amortization of fair value of time charter attached to vessels |  |                                          | -     
|Reversal of (impairment loss) / impairment                     |  |                                          | -     
|Gain from disposal of subsidiary                               |  |                                          | (2,257
|Adjusted (LBITDA)/EBITDA (unaudited)                           |  |                                          | (3,466



|                                                                                  |  | As of December 31,                       |       
|--------------------------------------------------------------------------------- |  | ---------------------------------------- | ------
|                                                                                  |  | (Expressed in Thousands of U.S. Dollars) |       
|                                                                                  |  | 2016                                     |       
|Statements of financial position data                                             |  |                                          |       
|Total non-current assets                                                          |  |                                          | 91,847
|Total current assets (including “Non-current assets classified as held for sale”) |  |                                          | 2,149 
|Total assets                                                                      |  |                                          | 93,996
|Total equity                                                                      |  |                                          | 20,760
|Total non-current liabilities                                                     |  |                                          | 42,100
|Total current liabilities                                                         |  |                                          | 31,136
|Total equity and liabilities                                                      |  |                                          | 93,996



|                                                       |  | Year Ended December 31, |       
|------------------------------------------------------ |  | ----------------------- | ------
|                                                       |  | 2016                    |       
|Consolidated statements of cash flows data             |  |                         |       
|Net cash (used in)/generated from operating activities |  |                         | (3,600
|Net cash (used in)/generated from investing activities |  |                         | 362   
|Net cash (used in)/generated from financing activities |  |                         | 1,396 



|                                            |  | Year Ended December 31, |      
|------------------------------------------- |  | ----------------------- | -----
|                                            |  | 2016                    |      
|Ownership days(1)                           |  |                         | 1,908
|Available days(2)                           |  |                         | 1,885
|Operating days(3)                           |  |                         | 1,830
|Bareboat charter days(4)                    |  |                         | -    
|Fleet utilization(5)                        |  |                         | 97.1 
|Average number of vessels(6)                |  |                         | 5.2  
|Daily time charter equivalent (TCE) rate(7) |  | $                       | 3,962



(1) Ownership days are
the aggregate number of days in a period during which each vessel in our fleet has been owned by us.

(2) Available days are the number of our
ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee,
vessel upgrades or special surveys.



7







(3) Operating days are the number of available
days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances.

(4) Bareboat charter days are the aggregate
number of days in a period during which the vessels in our fleet are subject to a bareboat charter.

(5) We calculate fleet utilization by dividing
the number of our operating days during a period by the number of our available days during the period.

(6) Average number of vessels is measured
by the sum of the number of days each vessel was part of our fleet during a relevant period divided by the number of calendar days
in such period.

(7) Time Charter Equivalent (TCE) rates
are our revenue less net revenue from our bareboat charters less voyage expenses during a period divided by the number of our available
days during the period excluding bareboat charter days. TCE is a measure not in accordance with generally accepted accounting principles,
or GAAP. Please read “Item 5. Operating and Financial Review and Prospects.”



The following table reflects the Voyage Revenues
to Daily Time Charter Equivalent Reconciliation for the periods presented.



|                                                   |  | Year Ended December 31,                                                              |      
|-------------------------------------------------- |  | ------------------------------------------------------------------------------------ | -----
|                                                   |  | (Expressed in Thousands of U.S. Dollars, except number of days and daily 
TCE rates) |      
|                                                   |  | 2016                                                                                 |      
|                                                   |  |                                                                                      |      
|Voyage revenues                                    |  |                                                                                      | 8,740
|Less: Voyage expenses                              |  |                                                                                      | 1,271
|Less: bareboat charter net revenue                 |  |                                                                                      | -    
|Net revenue excluding bareboat charter net revenue |  |                                                                                      | 7,469
|Available days net of bareboat charter days        |  |                                                                                      | 1,885
|Daily TCE rate                                     |  |                                                                                      | 3,962



B. Capitalization
and Indebtedness



Not Applicable.



C.  Reasons
for the Offer and Use of Proceeds



Not Applicable.



D.  Risk
Factors



This annual report on Form 20-F contains
forward-looking statements and information within the meaning of U.S. securities laws that involve risks and uncertainties. Our
actual results may differ materially from the results discussed in the forward-looking statements and information. Factors that
may cause such a difference include those discussed below and elsewhere in this annual report on Form 20-F.



Some of the following risks relate principally
to the industry in which we operate and our business in general. Other risks relate principally to the securities market and ownership
of our common shares. The occurrence of any of the events described in this section could significantly and negatively affect our
business, financial condition, operating results, and ability to pay dividends or the trading price of our common shares.



8







Risks relating to Our Industry



The international dry bulk shipping industry
is cyclical and volatile.



The international seaborne transportation industry
is cyclical and has high volatility in charter rates, vessel values and profitability. Fluctuations in charter rates result from
changes in the supply and demand for vessel capacity and changes in the supply and demand for energy resources, commodities, semi-finished
and finished consumer and industrial products internationally carried at sea. Since the early part of 2009, rates have been volatile,
but gradually recovered from market lows with further improvements taking place in the first half of 2010, before leveling out
in the second half of 2010 and declining in 2011 throughout 2012. In 2013 rates remained volatile reaching their lows in January
2013 and their highs in December 2013 while volatility continued during 2014 as well, with rates reaching their highs during January
2014 and their lows during July 2014. In 2015, the decreasing trend in rates continued. In February 2016 the market reached a new
all-time low and until the end of 2016 remained fairly depressed as compared to pre-2009 rates. Currently all of our vessels are
chartered on short-term time charters and on the spot market, and we are exposed therefore to changes in spot market and short-term
charter rates for dry bulk vessels and such changes affect our earnings and the value of our dry bulk vessels at any given time.
The supply of and demand for shipping capacity strongly influences freight rates. The factors affecting the supply and demand for
vessels are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.



Factors that influence demand for vessel capacity
include:



| | • | port and canal congestion charges;
| | - | ----------------------------------



| | • | general dry bulk shipping market conditions, including fluctuations in charterhire rates and vessel
values and demand for and production of dry bulk products;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | global and regional economic and political conditions, including exchange rates, trade deals, and
the rate and geographic distributions of economic growth;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | environmental and other regulatory developments;
| | - | ------------------------------------------------



| | • | the distance dry bulk cargoes are to be moved by sea; and
| | - | ---------------------------------------------------------



| | • | changes in seaborne and other transportation patterns.
| | - | ------------------------------------------------------



Factors that influence the supply of vessel
capacity include:



| | • | the size of the newbuilding orderbook;
| | - | --------------------------------------



| | • | the price of steel and vessel equipment;
| | - | ----------------------------------------



| | • | technological advances in vessel design and capacity;
| | - | -----------------------------------------------------



| | • | the number of newbuild deliveries, which among other factors relates to the ability of shipyards
to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | the scrapping rate of older vessels;
| | - | ------------------------------------



| | • | port and canal congestion;
| | - | --------------------------



| | • | the number of vessels that are in or out of service, including due to vessel casualties; and
| | - | --------------------------------------------------------------------------------------------



| | • | changes in environmental and other regulations that may limit the useful lives of vessels.
| | - | ------------------------------------------------------------------------------------------



In addition to the prevailing and anticipated
freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel
values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys,
normal maintenance costs, insurance coverage costs, the efficiency and age profile of the existing dry bulk fleet in the market,
and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations.
These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to
correctly assess the nature, timing and degree of changes in industry conditions.



We anticipate that the future demand for our
dry bulk vessels and charter rates will be dependent upon continued economic growth in the world’s economies, seasonal and
regional changes in demand and changes to the capacity of the global dry bulk vessel fleet and the sources and supply of dry bulk
cargo to be transported by sea. Adverse economic, political, social or other developments could negatively impact charter rates
and therefore have a material adverse effect on our business, results of operations and ability to pay dividends. We may also decide
that it makes economic sense to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those
vessels will not be able to earn any hire.



9







The dry bulk vessel charter market remains
significantly below its high in 2008.



The revenues, earnings and profitability of
companies in our industry are affected by the charter rates that can be obtained in the market, which is volatile and has experienced
significant declines since its highs in the middle of 2008. The Baltic Dry Index, or the BDI, which is published daily by the Baltic
Exchange Limited, or the Baltic Exchange, a London-based membership organization that provides daily shipping market information
to the global investing community, is an average of selected ship brokers’ assessments of time charter rates paid by a customer
to hire a dry bulk vessel to transport dry bulk cargoes by sea. The BDI has long been viewed as the main benchmark to monitor the
movements of the dry bulk vessel charter market and the performance of the entire dry bulk shipping market. The BDI declined from
a high of 11,793 in May 2008 to a low of 663 in December 2008, which represents a decline of 94.0% within a single calendar year.
Since 2009, the BDI has remained fairly depressed compared to historical numbers. The BDI reached a new all-time low of 290 in
February 10, 2016 and went as high as 1,257 in November 18, 2016. The BDI ranged from 685 to 983 from January until February 2017.
The dry bulk market remains volatile and significantly depressed.



The decline and volatility in charter rates
is primarily due to the number of newbuilding deliveries as vessel oversupply has taken a toll on the market. Increased demand
for dry bulk commodities has been unable to fully absorb new deadweight tonnage, or dwt, that entered the market in recent years.
Although the number of dry bulk carriers on order has declined from the historic highs in recent years, there remains a substantial
amount of capacity on order. Due to a lack of financing, we expect cancellations and/or slippage of newbuilding orders. While vessel
supply will continue to be affected by the delivery of new vessels and the removal of vessels from the global fleet, either through
scrapping or accidental losses, an over-supply of dry bulk carrier capacity could exacerbate the recent decrease in charter rates
or prolong the period during which low charter rates prevail.



The decline and volatility in charter rates
in the dry bulk market also affects the value of our dry bulk vessels, which follows the trends of dry bulk charter rates, and
earnings on our charters, and similarly affects our cash flows, liquidity and compliance with the covenants contained in our loan
arrangements.



Global economic conditions may continue
to negatively impact the dry bulk shipping industry.



In the current global economy, operating businesses
have recently faced tightening credit, weakening demand for goods and services, weak international liquidity conditions, and declining
markets.



The international shipping industry and
dry bulk market are highly competitive.



The shipping industry and dry bulk market are
capital intensive and highly fragmented with many charterers, owners and operators of vessels and are characterized by intense
competition. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do.
The trend towards consolidation in the industry is creating an increasing number of global enterprises capable of competing in
multiple markets, which may result in a greater competitive threat to us. Our competitors may be better positioned to devote greater
resources to the development, promotion and employment of their businesses than we are. Competition for the transportation of cargo
by sea is intense and depends on customer relationships, operating expertise, professional reputation, price, location, size, age,
condition and the acceptability of the vessel and its operators to the charterers. Competition may increase in some or all of our
principal markets, including with the entry of new competitors, who may operate larger fleets through consolidations or acquisitions
and may be able to sustain lower charter rates and offer higher quality vessels than we are able to offer. We may not be able to
continue to compete successfully or effectively with our competitors and our competitive position may be eroded in the future,
which could have an adverse effect on our fleet utilization and, accordingly, business, financial condition, results of operations
and ability to pay dividends.



The Euro may not be stable and countries
may not be able to refinance their debts.



As a result of the credit crisis in Europe,
in particular in Greece, Cyprus, Italy, Ireland, Portugal and Spain, concerns persist regarding the debt burden of certain Eurozone
countries and their ability to meet future financial obligations and the overall stability of the Euro. Despite efforts by European
Council in establishing the European Financial Stability Facility and the European Stability Mechanism, and the work of central
bankers to renegotiate sovereign debt, concerns persist regarding the debt burden of Eurozone countries, their ability to meet
future financial obligations, and the overall stability of the Euro. As we earn revenue in United States Dollars, the strengthening
of the Euro (with which we pay some of our expenses) as compared to the United States Dollar could increase our expenses. An extended
period of adverse development in the outlook for European countries could reduce the overall demand for dry bulk cargoes and for
our services.



10







The current state of the global financial
markets and current economic conditions may adversely impact the dry bulk shipping industry.



Global financial markets and economic conditions
have been, and continue to be, volatile. Recently, operating businesses in the global economy have faced tightening credit, weakening
demand for goods and services, deteriorating international liquidity conditions, and declining markets. There has been a general
decline in the willingness by banks and other financial institutions to extend credit, particularly in the shipping industry, due
to the historically volatile asset values of vessels. As the shipping industry is highly dependent on the availability of credit
to finance and expand operations, it has been negatively affected by this decline.



Also, as a result of concerns about the stability
of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets
has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt
at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these
factors, we cannot be certain that financing will be available if needed and to the extent required, on acceptable terms. If financing
is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come
due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of
business opportunities as they arise.



If the current global economic environment
persists or worsens, we may be negatively affected in the following ways:



| | · | we may not be able to employ our vessels at charter rates as favorable to us as historical rates
or operate our vessels profitably; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | · | the market value of our vessels could decrease, which may cause us to recognize losses if any of
our vessels are sold.
| | - | ----------------------------------------------------------------------------------------------------------------------



In addition, lower demand for dry bulk cargoes
as well as diminished trade credit available for the delivery of such cargoes have led to decreased demand for dry bulk carriers,
creating downward pressure on charter rates and vessel values. The relatively weak global economic conditions have and may continue
to have a number of adverse consequences for dry bulk and other shipping sectors, including, among other things:



| | · | low charter rates, particularly for vessels employed on short-term time charters or in the spot market;
| | - | -------------------------------------------------------------------------------------------------------



| | · | decreases in the market value of dry bulk vessels and limited secondhand market for the sale of vessels;
| | - | --------------------------------------------------------------------------------------------------------



| | · | limited financing for vessels;
| | - | ------------------------------



| | · | widespread loan covenant defaults; and
| | - | --------------------------------------



| | · | declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers.
| | - | -----------------------------------------------------------------------------------------------



The occurrence of any of the foregoing could
have a material adverse effect on our business, results of operations, cash flows and financial condition. We may also decide that
it makes economic sense to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels
will not be able to earn any hire.



We depend on spot charters in volatile
shipping markets.



We currently charter all five vessels we own
on the spot charter market. The spot charter market is highly competitive and spot charter rates may fluctuate significantly based
upon available charters and the supply of and demand for seaborne shipping capacity. While our focus on the spot market may enable
us to benefit if industry conditions strengthen, we must consistently procure spot charter business. Conversely, such dependence
makes us vulnerable to declining market rates for spot charters and to the off-hire periods including ballast passages. Rates within
the spot charter market are subject to volatile fluctuations while longer-term time charters provide income at pre-determined rates
over more extended periods of time. There can be no assurance that we will be successful in keeping our vessels fully employed
in these short-term markets or that future spot rates will be sufficient to enable the vessels to be operated profitably. At current
spot charter rates, we don’t believe that we will be operating profitably. A significant decrease in charter rates would
affect value and adversely affect our profitability, cash flows and ability to pay dividends. We cannot give assurances that future
available spot charters will enable us to operate our vessels profitably.



11







We may also decide that it makes economic sense
to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels will not be able to earn
any hire.



An over-supply of dry bulk carrier capacity
may depress charter rates.



The market supply of dry bulk vessels has been
increasing as a result of the delivery of numerous newbuilding orders over the last few years. Newbuildings were delivered in significant
numbers starting at the beginning of 2006 and continued to be delivered through 2016, even though the fleet growth percentage has
substantially reduced during the last 2 years. An oversupply of dry bulk vessel capacity, particularly during a period of economic
recession, may result in a reduction of charter hire rates. If we cannot enter into charters on acceptable terms, we may have to
secure charters on the spot market, where charter rates are more volatile and revenues are, therefore, less predictable, or we
may not be able to charter our vessels at all. In addition, a material increase in the net supply of dry bulk vessel capacity without
corresponding growth in dry bulk vessel demand could have a material adverse effect on our fleet utilization (including ballast
days) and our charter rates generally, and could, accordingly, materially adversely affect our business, financial condition, results
of operations and ability to pay dividends.



We may also decide that it makes economic sense
to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels will not be able to earn
any hire.



The market values of our vessels have
declined, and may decline further and have triggered certain financial covenants under our existing and potentially future loan
and credit facilities. This could have a material adverse effect on our ability to continue our business.



The market value of dry bulk vessels has generally
experienced high volatility, and is currently at a low value. The market prices for secondhand and newbuilding dry bulk vessels
in the recent past have declined from historically high levels to low levels within a short period of time. The market value of
our vessels may increase and decrease depending on a number of factors including:



| | Ø | prevailing level of charter rates;
| | - | ----------------------------------



| | Ø | age of vessels;
| | - | ---------------



| | Ø | general economic and market conditions affecting the shipping industry;
| | - | -----------------------------------------------------------------------



| | Ø | competition from other shipping companies;
| | - | ------------------------------------------



| | Ø | configurations, sizes and ages of vessels;
| | - | ------------------------------------------



| | Ø | supply and demand for vessels;
| | - | ------------------------------



| | Ø | other modes of transportation;
| | - | ------------------------------



| | Ø | cost of newbuildings;
| | - | ---------------------



| | Ø | governmental or other regulations; and
| | - | --------------------------------------



| | Ø | technological advances.
| | - | -----------------------



Our loan agreement with DVB Bank SE, which
we refer to as the DVB Loan Agreement and our loan agreement with HSH Nordbank AG, which we refer to as the HSH Loan Agreement
are secured by mortgages on our vessels, and require us to maintain specified collateral coverage ratios and to satisfy financial
covenants, including requirements based on the market value of our vessels and our net worth. Since the middle of 2008, the prevailing
conditions in the dry bulk charter market coupled with the general difficulty in obtaining financing for vessel purchases have
led to a significant decline in the market values of our vessels. Furthermore, each of our loan arrangements contains a cross-default
provision that may be triggered by a default under any of our other loans, other than the unsecured credit facilities with Firment
Trading Limited and Silaner Investments Limited, both affiliates of our chairman Mr. George Feidakis, which we refer to as the
Firment Credit Facility and Silaner Credit Facility, respectively.



12







As of December 31, 2016, we satisfied the covenants
included in our loan agreements with HSH Nordbank AG and DVB Bank SE following amendments made by supplemental agreements that
we entered into in 2016 which relaxed or waived certain covenants up to March 2017. In March 2017, we reached agreements in principle
with HSH Nordbank AG and DVB Bank SE (which remain subject to definite documentation) to amend the loan agreements, including amendments
to relax or waive certain covenants of both of the loan agreements for the period from April 2017 to April 2018. For a more detailed
discussion see Item 5.B Liquidity and Capital Resources—Indebtedness and Note 12 in the Consolidated Financial Statements
filed herewith.



Further declines of market values of our vessels
may affect our ability to comply with various covenants and could also limit the amount of funds we are permitted to borrow under
our current or future loan arrangements. If we are unable to comply with the financial and other covenants under any of the DVB
Loan Agreement, the HSH Loan Agreement, the Firment Credit Facility or the Silaner Credit Facility, and if we are unable to obtain
relaxations and/or waivers, our lenders could accelerate our indebtedness and foreclose on vessels in our fleet, which would impair
our ability to continue to conduct our business. If our indebtedness were accelerated in full or in part, it would be very difficult
in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels
if our lenders foreclose upon their liens, which would adversely affect our business, financial condition, ability to continue
our business and pay dividends.



For a more detailed discussion on our loan
covenants and cross-default provisions, see “Item 5.B Liquidity and Capital Resources—Indebtedness.”



If we sell any vessel at a time when vessel
prices have fallen and before we have recorded an impairment adjustment to our consolidated financial statements, the sale price
may be agreed at a value lower than the vessel’s depreciated book value as in our consolidated financial statements at that
time, resulting in a loss and a respective reduction in earnings. If the market values of our vessels decrease, such decrease and
its effects could have a material adverse effect on our business, financial condition, results of operations and ability to pay
dividends.



If a determination is made that a vessel’s
future useful life is limited or its future earnings capacity is reduced, it could result in an impairment of its value on our
consolidated financial statements that would result in a charge against our earnings and the reduction of our stockholders’
equity. These impairment costs could be very substantial.



The Public Company Accounting Oversight
Board inspection of our independent accounting firm could lead to findings in our auditors' reports and challenge the accuracy
of our published audited consolidated financial statements.



Auditors of U.S. public companies are required
by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance with U.S.
law and professional standards in connection with performance of audits of financial statements filed with the SEC. For several
years certain European Union countries, including Greece, did not permit the PCAOB to conduct inspections of accounting firms established
and operating in such European Union countries, even if they were part of major international firms. Accordingly, unlike for most
U.S. public companies, the PCAOB was prevented from evaluating our auditor's performance of audits and its quality control procedures,
and, unlike stockholders of most U.S. public companies, we and our shareholders were deprived of the possible benefits of such
inspections. During 2015, Greece agreed to allow the PCAOB to conduct inspections of accounting firms operating in Greece. In the
future, such PCAOB inspections could result in findings in our auditors' quality control procedures, question the validity of the
auditor's reports on our published consolidated financial statements and the effectiveness of our internal control over financial
reporting, and cast doubt upon the accuracy of our published audited consolidated financial statements.



13







Our industry is subject to complex laws
and regulations.



Our operations are subject to numerous laws
and regulations in the form of international conventions and treaties, national, state and local laws and national and international
regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership
and operation of our vessels. These requirements include but are not limited to: U.S. Oil Pollution Act 1990, as amended, which
we refer to as OPA; International Convention for the Safety of Life at Sea, 1974, as amended, which we refer to as SOLAS; International
Convention on Load Lines, 1966; International Convention for the Prevention of Pollution from Ships, 1973, as amended by the 1978
Protocol, which we refer to as MARPOL; International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, which
we refer to as the Bunker Convention; International Convention on Liability and Compensation for Damage in Connection with the
Carriage of Hazardous and Noxious Substances by Sea, 1996, as superseded by the 2010 Protocol, which we refer to as the HNS Convention;
International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by the 1992 Protocol and further amended
in 2000, which we refer to as the CLC; International Convention on the Establishment of an International Fund for Compensation
for Oil Pollution Damage, 1971, as amended, which we refer to as the Fund Convention; and Marine Transportation Security Act of
2002, which we refer to as the MTSA.



Government regulation of vessels, particularly
in the area of environmental requirements, can be expected to become more stringent in the future and could require us to incur
significant capital expenditures on our vessels to keep them in compliance, or even to scrap or sell certain vessels altogether.
Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational
changes and increased management costs and may affect the resale value or useful lives of our vessels. We may also incur additional
costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to
air emissions, the management of ballast water, recycling of vessels, maintenance and inspection, elimination of tin-based paint,
development and implementation of safety and emergency procedures and insurance coverage or other financial assurance of our ability
to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows
and financial condition and our ability to pay dividends.



These requirements can also affect the resale
prices or useful lives of our vessels or require reductions in capacity, vessel modifications or operational changes or restrictions.
Failure to comply with these requirements could lead to decreased availability of or more costly insurance coverage for environmental
matters or result in the denial of access to certain jurisdictional waters or ports, or detention in certain ports. Under local,
national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup
obligations and claims for impairment of the environment, personal injury and property damages in the event that there is a release
of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations. Violations of, or liabilities
under, environmental regulations can result in substantial penalties, fines and other sanctions, including, in certain instances,
seizure or detention of our vessels. Events of this nature would have a material adverse effect on our business, financial condition
and results of operations.



The operation of our vessels is affected by
the requirements set forth in the International Management Code for the Safe Operation of Ships and for Pollution Prevention, or
ISM Code. The ISM Code requires the party with operational control of the vessel to develop, implement and maintain an extensive
“Safety Management System” that includes, among other things, the adoption of a safety and environmental protection
policy setting forth instructions and procedures for safe vessel operation and protection of the environment and describing procedures
for dealing with emergencies. Further details in relation to the ISM Code are set out below in the section headed “Environmental
and Other Regulations”. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased
liability, and, if the implementing legislation so provides, to criminal sanctions, may invalidate or result in the loss of existing
insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention
in, certain ports. In addition, if we fail to maintain ISM Code certification for our vessels, we may also breach covenants in
certain of our credit and loan facilities that require that our vessels be ISM-Code certified. If we breach such covenants due
to failure to maintain ISM Code certification and are unable to remedy the relevant breach, our lenders could accelerate our indebtedness
and foreclose on the vessels in our fleet securing those credit and loan facilities. As of the date of this annual report on Form
20-F, each of our vessels is ISM Code-certified.



Climate change
and greenhouse gas restrictions may be imposed.



Due to concern over the risk of climate change,
a number of countries and the International Maritime Organization, or IMO, have adopted, or are considering the adoption of, regulatory
frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes,
carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. In addition, although the emissions
of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework
Convention on Climate Change, which required adopting countries to implement national programs to reduce emissions of certain gases,
a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations
and obligations relating to climate change could increase our costs related to operating and maintaining our vessels and require
us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions, or administer and
manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected.



14







Charterers have been placed under significant
financial pressure, thereby increasing our charter counterparty risk.



The continuing weakness in demand for dry bulk
shipping services and any future declines in such demand could result in financial challenges faced by our charterers and may increase
the likelihood of one or more of our charterers being unable or unwilling to pay us contracted charter rates. We expect to generate
most of our revenues from these charters and if our charterers fail to meet their obligations to us, we will sustain significant
losses which could have a material adverse effect on our financial condition and results of operations.



Capital expenditures and other costs
necessary to operate and maintain our vessels may increase.



Changes in safety or other equipment standards,
as well as compliance with standards imposed by maritime self-regulatory organizations and customer requirements or competition,
may require us to make additional expenditures. In order to satisfy these requirements, we may, from time to time, be required
to take our vessels out of service for extended periods of time, with corresponding losses of revenues. In the future, market conditions
may not justify these expenditures or enable us to operate some or all of our vessels profitably during the remainder of their
economic lives.



Seasonal fluctuations in industry demand
could affect us.



We operate our vessels in markets that have
historically exhibited seasonal variations in demand and, as a result, in charter rates. This seasonality may result in quarter-to-quarter
volatility in our results of operations, which could affect the amount of dividends, if any, that we pay to our shareholders. The
market for marine dry bulk transportation services is typically stronger in the fall and winter months in anticipation of increased
consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather
patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. This seasonality could have a material
adverse effect on our business, financial condition and results of operations.



We may also decide that it makes economic sense
to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels will not be able to earn
any hire.



Our insurance may not be adequate to
cover our losses that may result from our operations.



We carry insurance to protect us against most
of the accident-related risks involved in the conduct of our business, including marine hull and machinery insurance, war risk
insurance, protection and indemnity insurance, which includes pollution risks, crew insurance and war risk insurance. However,
we may not be adequately insured to cover losses from our operational risks, which could have a material adverse effect on us.
Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the insurers if we take, or
fail to take, certain action, such as failing to maintain certification of our vessels with applicable maritime regulatory organizations.
Any significant uninsured or underinsured loss or liability could have a material adverse effect on our business, results of operations,
cash flows and financial condition and our ability to pay dividends. It may also result in protracted legal litigation. In addition,
we may not be able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance market conditions.
We maintain, for each of our vessels, pollution liability coverage insurance for $1.0 billion per event. If damages from a catastrophic
spill exceed our insurance coverage, it would have a materially adverse effect on our business, results of operations and financial
condition and our ability to pay dividends to our shareholders.



Moreover, insurers have over the last few years
increased premiums and reduced or restricted coverage for losses caused by terrorist acts generally.



In addition, we do not currently carry and
may not carry loss-of-hire insurance, which covers the loss of revenue during extended vessel off-hire periods, such as those that
occur during an unscheduled drydocking due to damage to the vessel from accidents. Accordingly, any loss of a vessel or extended
vessel off-hire, due to an accident or otherwise, could have a material adverse effect on our business, results of operations,
financial condition and our ability to pay dividends.



Our vessels are exposed to operational
risks.



The operation of any vessel includes risks
such as weather conditions, mechanical failure, collision, fire, contact with floating objects, cargo or property loss or damage
and business interruption due to political circumstances in countries, piracy, terrorist attacks, armed hostilities and labor strikes.
Such occurrences could result in death or injury to persons, loss, damage or destruction of property or environmental damage, delays
in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions
on conducting business, higher insurance rates and damage to our reputation and customer relationships generally.



15







In the past, political conflicts have also
resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian
Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea, the Gulf of
Aden and parts of the Indian Ocean and West Africa. Continuing conflicts and recent developments in the Middle East and North Africa,
including Egypt, Syria, Iran, Iraq and Libya, and the presence of United States and other armed forces in the Middle East and Asia
could produce armed conflict or be the target of terrorist attacks, and lead to civil disturbance and uncertainty in financial
markets. If these attacks and other disruptions result in areas where our vessels are deployed being characterized by insurers
as “war risk” zones or Joint War Committee “war, strikes, terrorism and related perils” listed areas, premiums
payable for such coverage could increase significantly and such insurance coverage may be more difficult or impossible to obtain.
In addition, there is always the possibility of a marine disaster, including oil spills and other environmental damage. Although
our vessels carry a relatively small amount of oil used for fuel (“bunkers”), a spill of oil from one of our vessels
or losses as a result of fire or explosion could be catastrophic under certain circumstances.



We may not be adequately insured against all
risks, and our insurers may not pay particular claims. With respect to war risks insurance, which we usually obtain for certain
of our vessels making port calls in designated war zone areas, such insurance may not be obtained prior to one of our vessels entering
into an actual war zone, which could result in that vessel not being insured. Even if our insurance coverage is adequate to cover
our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Under the terms of our credit facilities,
we will be subject to restrictions on the use of any proceeds we may receive from claims under our insurance policies. Furthermore,
in the future, we may not be able to maintain or obtain adequate insurance coverage at reasonable rates for our fleet. We may also
be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members
of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our insurance
policies also contain deductibles, limitations and exclusions which may increase our costs in the event of a claim or decrease
any recovery in the event of a loss. If the damages from a catastrophic oil spill or other marine disaster exceeded our insurance
coverage, the payment of those damages could have a material adverse effect on our business and could possibly result in our insolvency.



In general, we do not carry loss of hire insurance.
Occasionally, we may decide to carry loss of hire insurance when our vessels are trading in areas where a history of piracy has
been reported. Loss of hire insurance covers the loss of revenue during extended vessel off-hire periods, such as those that occur
during an unscheduled drydocking or unscheduled repairs due to damage to the vessel. Accordingly, any loss of a vessel or any extended
period of vessel off- hire, due to an accident or otherwise, could have a material adverse effect on our business, financial condition
and results of operations.



We may also decide that it makes economic sense
to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels will not be able to earn
any hire.



We may be subject to funding calls by
our protection and indemnity clubs, and our clubs may not have enough resources to cover claims made against them.



We are indemnified for legal liabilities incurred
while operating our vessels through membership of protection and indemnity, or P&I, associations, otherwise known as P&I
clubs. P&I clubs are mutual insurance clubs whose members must contribute to cover losses sustained by other club members.
The objective of a P&I club is to provide mutual insurance based on the aggregate tonnage of a member’s vessels entered
into the club. Claims are paid through the aggregate premiums of all members of the club, although members remain subject to calls
for additional funds if the aggregate premiums are insufficient to cover claims submitted to the club. Claims submitted to the
club may include those incurred by members of the club, as well as claims submitted by other P&I clubs with which our club
has entered into interclub agreements. We cannot assure you that the P&I club to which we belong will remain viable or that
we will not become subject to additional funding calls, which could adversely affect us.



If our vessels suffer damage, they may need
to be repaired at a drydocking facility. The costs of drydocking repairs are unpredictable and may be substantial. We may have
to pay drydocking costs that our insurance does not cover in full. The loss of earnings while these vessels are being repaired
and repositioned, as well as the actual cost of these repairs, would decrease our earnings. In addition, space at drydocking facilities
is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking
facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels’
positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities
would decrease our earnings.



16







We may be subject to increased inspection
procedures, tighter import and export controls and new security regulations.



International shipping is subject to various
security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection
procedures can result in the seizure of the cargo and contents of our vessels, delays in the loading, offloading or delivery and
the levying of customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures
could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also impose
additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo impractical.
Any such changes or developments may have a material adverse effect on our business, financial condition, results of operations
and our ability to pay dividends.



Rising fuel prices may adversely affect
our profits.



Fuel is a significant, if not the largest,
expense if vessels are under voyage charter or if consumed during ballast days. Moreover, the cost of fuel will affect the profit
we can earn on the spot market. Upon redelivery of vessels at the end of a time charter, we may be obliged to repurchase the fuel
on board at prevailing market prices, which could be materially higher than fuel prices at the inception of the time charter period.
As a result, an increase in the price of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable
and fluctuates based on events outside our control, including geopolitical events, supply and demand for oil and gas, actions by
the Organization of the Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries
and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future,
which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.



Increases in crew costs may adversely
affect our profits.



Crew costs are a significant expense for us
under our charters. There is a limited supply of well-qualified crew. We generally bear crewing costs under our charters. Increases
in crew costs may adversely affect our profitability.



The operation of dry bulk vessels has
certain unique operational risks.



The operation of certain vessel types, such
as dry bulk vessels, has certain unique risks. With a dry bulk vessel, the cargo itself and its interaction with the vessel can
be a risk factor. By their nature, dry bulk cargoes are often heavy, dense, easily shifted and react badly to water exposure. In
addition, dry bulk vessels are often subjected to battering during unloading operations with grabs, jackhammers (to pry encrusted
cargoes out of the hold) and small bulldozers. This may cause damage to the vessel. Vessels damaged due to treatment during unloading
procedures may be more susceptible to breach while at sea. Hull breaches in dry bulk vessels may lead to the flooding of the vessels
holds. If a dry bulk vessel suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its
pressure may buckle the vessels bulkheads leading to the loss of a vessel. If we are unable to adequately maintain our vessels
we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial
condition, results of operations and ability to pay dividends. In addition, the loss of any of our vessels could harm our reputation
as a safe and reliable vessel owner and operator.



Maritime claimants could arrest our vessels.



Crew members, suppliers of goods and services
to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel, or other assets of the relevant
vessel-owning company, for unsatisfied debts, claims or damages even if we are not at fault, for example, if we pay a supplier
for bunkers who subcontracts the supply and does not pay such subcontractor. In many jurisdictions, a claimant may seek to obtain
security for its claim by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels,
could cause us to default on a charter, breach covenants in the DVB Loan Agreement or the HSH Loan Agreement, interrupt our cash
flow and require us to pay large sums of money to have the arrest or attachment lifted. Please see “Item 5.B. Liquidity and
Capital Resources—Indebtedness” for further information.



In addition, in some jurisdictions, such as
South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to
the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same
owner. Claimants could attempt to assert “sister ship” liability against one vessel in our fleet for claims relating
to another of our vessels.



17







Governments could requisition our vessels
during a period of war or emergency.



A government could requisition one or more
of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes the
owner. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated
charter rates. Generally, requisitions occur during a period of war or emergency, although governments may elect to requisition
vessels in other circumstances. Even if we would be entitled to compensation in the event of a requisition of one or more of our
vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively
impact our business, financial condition, results of operations and ability to pay dividends.



The ongoing uncertainty related to the
Greek sovereign debt crisis may adversely affect our operating results.



Greece has experienced a macroeconomic
downturn during recent years, including as a result of the sovereign debt crisis and the related austerity measures implemented
by the Greek government. Our operations in Greece may be subjected to new regulations or regulatory action that may require us
to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes
or other fees. We also face the risk that strikes, work stoppages, civil unrest and violence within Greece may disrupt our shore-side
operations located in Greece. The Greek government’s taxation authorities have increased their scrutinization of individuals
and companies to secure tax law compliance. If economic and financial market conditions remain uncertain, persist or deteriorate
further, the Greek government may impose further changes to tax and other laws to which may be subject or change the ways they
are enforced, which may adversely affect our business, compliance costs, operating results, and financial condition.



Compliance with safety and other vessel
requirements imposed by classification societies may be costly.



The hull and machinery of every commercial
vessel must be certified as safe and seaworthy in accordance with applicable rules and regulations, and accordingly vessels must
undergo regular surveys. All of the vessels that we operate or manage are classed by one of the major classification societies,
including Nippon Kaiji Kyokai (Class NK), DNV GL and Bureau Veritas. Vessels must undergo annual surveys, immediate surveys and
special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery
would be surveyed over a five-year period. Our vessels are on special survey cycles for hull inspection and continuous survey cycles
for machinery inspection. Every vessel is also required to be drydocked every two to three years for inspection of its underwater
parts. If any vessel does not maintain its class and/or fails any annual, intermediate or special survey, the vessel may be unable
to trade between ports and may be unemployable which could trigger the violation of certain covenants in the DVB Loan Agreement
and the HSH Loan Agreement. Such an occurrence could have a material adverse impact on our business, financial condition, results
of operations and ability to pay dividends. Please see “Item 5.B. Liquidity and Capital Resources—Indebtedness”
for further information.



A further economic slowdown or changes
in the economic, regulatory and political environment in the Asia Pacific region could reduce dry bulk trade demand.



A significant number of the port calls made
by our vessels involve the transportation of dry bulk products to ports in the Asia Pacific region. As a result, continued economic
slowdown in the region or changes in the regulatory environment, and particularly in China or Japan, could have an adverse effect
on our business, results of operations, cash flows and financial condition. Before the global economic financial crisis that began
in 2008, China had one of the world’s fastest growing economies in terms of gross domestic product, or GDP, which had a significant
impact on shipping demand. The growth rate of China’s GDP continues to remain lower than originally anticipated. In addition,
China has imposed measures to restrain lending, which may further contribute to a slowdown in its economic growth. China and other
countries in the Asia Pacific region may continue to experience slowed or even negative economic growth in the future.



Many of the economic and political reforms
adopted by the Chinese government are unprecedented or experimental and may be subject to revision, change or abolition based upon
the outcome of such experiments. If the Chinese government does not continue to pursue a policy of economic reform, the level of
imports of exports of dry bulk products to and from China could be adversely affected by changes to these economic reforms by the
Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese
government, such as changes in laws, regulations or restrictions on importing commodities into the country. Notwithstanding economic
reform, the Chinese government may adopt policies that favor domestic shipping companies and may hinder our ability to compete
with them effectively. Moreover, a significant or protracted slowdown in the economies of the United States, the European Union
or various Asian countries or changes in the regulatory environment may adversely affect economic growth in China and elsewhere.
Our business, results of operations, cash flows and financial condition could be materially and adversely affected by an economic
downturn or changes in the regulatory environment in any of these countries.



18







We conduct a substantial amount of business
in China.



The Chinese legal system is based on written
statutes and their legal interpretation by the Standing Committee of the National People’s Congress. Prior court decisions
may be cited for reference but have limited precedential value. Since 1979, the Chinese government has been developing a comprehensive
system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters
such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and
regulations are relatively new, there is a general lack of internal guidelines or authoritative interpretive guidance and because
of the limited number of published cases and their non-binding nature interpretation and enforcement of these laws and regulations
involve uncertainties. We conduct a substantial portion of our business in China or with Chinese counter parties. For example,
we enter into charters with Chinese customers, which charters may be subject to new regulations in China. We may, therefore, be
required to incur new or additional compliance or other administrative costs, and pay new taxes or other fees to the Chinese government.
Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities could affect
our vessels that are either chartered to Chinese customers or that call to Chinese ports and could have a material adverse effect
on our business, results of operations and financial condition and our ability to pay dividends.



The Chinese economy differs from the economies
of western countries in such respects as structure, government involvement, level of development, growth rate, capital reinvestment,
allocation of resources, bank regulation, currency and monetary policy, rate of inflation and balance of payments position. Although
state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government
is reducing the level of direct control that it exercises over the economy. There is an increasing level of freedom and autonomy
in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a “market
economy” and enterprise reform, although it still acts with greater control than a truly free-market economy. Many of the
Chinese government’s reforms are unprecedented or experimental and may be subject to revision, change or abolition based
upon the outcome of such experiments. The level of imports to and exports from China could be adversely affected by the failure
to continue market reforms or changes to existing pro-export economic policies. The level of imports to and exports from China
may also be adversely affected by changes in political, economic and social conditions (including a slowing of economic growth)
or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, internal
political instability, changes in currency policies, changes in trade policies and territorial or trade disputes. A decrease in
the level of imports to and exports from China could adversely affect our business, operating results and financial condition.



If economic conditions throughout the
world do not improve, it will impede our operations.



Negative trends in the global economy that
emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy continues to face a number
of new challenges, including uncertainty related to the winding down of the U.S. Federal Reserve’s bond buying program and
declining global growth rates. These challenges also include continuing turmoil and hostilities in the Middle East, Ukraine, North
Africa, the Middle East, and other geographic areas and countries and continuing economic weakness in the European Union. An extended
period of deterioration in the outlook for the world economy could increase our bunker prices and lessen overall demand for our
services. Such changes could adversely affect our results of operations and cash flows.



We face risks attendant to changes in economic
environments, changes in interest rates and instability in the banking and securities markets around the world, among other factors.
We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental
factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results
of operations and may cause the price of our common shares to decline.



Continued economic slowdown in the Asia Pacific
region, particularly in China, may exacerbate the effect on us, as we anticipate a significant number of the port calls made by
our vessels will continue to involve the loading or discharging of dry bulk commodities in ports in the Asia Pacific region. Before
the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms
of GDP, which had a significant impact on shipping demand. The growth rate of China’s GDP is estimated to have decreased
to approximately 6.8% for the year ended December 31, 2016. China has recently imposed measures to restrain lending, which may
further contribute to a slowdown in its economic growth, while it has announced plans to gradually transition from an investment
led growth model to a consumption driven economic growth model, which could lead to smaller demand for iron ore and other commodities.
This transition may take place over the span of a number of years, and there can be no assurance as to the time frame for such
a transformation or that any such transformation will occur at all. It is possible that China and other countries in the Asia
Pacific region will continue to experience slowed or even negative economic growth in the near future. Moreover, the current economic
slowdown in the economies of the United States, the European Union and other Asian countries may further adversely affect economic
growth in China and elsewhere. Our business, financial condition and results of operations, ability to pay dividends, if any, as
well as our future prospects, will likely be materially and adversely affected by a further economic downturn in any of these countries.



19







Company Specific Risk Factors



At December 31, 2016, Globus’s
current liabilities exceeded its current assets.



Working capital, which is current assets,
minus current liabilities, including the current portion of long-term debt, amounted to a working capital deficit of $29 million
as of December 31, 2016.



Current liabilities as of December 31, 2016
include:



(1) the amount outstanding of $2.8
million with respect to the HSH Loan Agreement with HSH Nordbank AG. Globus reached an agreement in principle to amend the HSH
Loan Agreement (which is subject to completing final documentation) with HSH Nordbank AG in March 2017, including amendments that
would provide for the principal repayment of $1 million in 2017 and the deferral of the four scheduled principal installments
due within 2017, each amounting to $693,595, to the balloon payment. For more information, see Item 5.B Liquidity and Capital
Resources – Indebtedness.”



(2) the amount outstanding of $3.4
million with respect to the Loan Agreement with DVB Bank SE. In March 2017, Globus reached an agreement in principle to amend
the DVB Loan Agreement (which is subject to completing final documentation) including amendments to relax or waive certain covenants
for the period from April 2017 to April 2018. It was agreed that the amendments will provide that Globus will make a principal
prepayment of $1.7 million by September 2017 and another $1.7 million would be deferred to the balloon payments. For more information,
see Item 5.B Liquidity and Capital Resources – Indebtedness.”



(3) the total outstanding of $17.4
million with respect to the Firment Credit Facility, which was reduced when we issued shares and warrants, and the remainder of
which was repaid. For more information, see Item 5.B Liquidity and Capital Resources – Indebtedness.”



In March 2017, the Company entered into agreements
in principle to amend the loan agreements (which are subject to completing final documentation) with DVB Bank SE and HSH Nordbank
AG. For more information, see Item 5.B Liquidity and Capital Resources – Indebtedness.”



After the effect of these agreements the working
capital deficit was approximately $9.5 million as of December 31, 2016.



We may breach the covenants contained
in the DVB Loan Agreement and the HSH Loan Agreement.



As of December 31, 2016, the Company was not
in breach of the financial covenants included in all of its loan agreements.



In March 2017, we agreed in principle with
HSH Nordbank AG and DVB Bank SE to amend the HSH Loan Agreement and the DVB Loan Agreement, respectively, (subject to completing
final documentation) including amendments that will provide for the relaxation and/or waiver of certain financial covenants, including
maintaining a minimum liquidity and minimum net worth. We may not be able to meet these relaxed terms and cannot guarantee that
we will be able to obtain waivers in the future.



If the agreements in principle reached in March
2017 with HSH Nordbank AG and DVB Bank SE do not result in the amendments to the respective loan agreements as contemplated by
such agreements, we may breach covenants contained in such loan agreements constituting an event of default. If an event of default
occurs under the DVB Loan Agreement or the HSH Loan Agreement the respective lender could elect to declare the outstanding debt,
together with accrued interest and other fees, to be immediately due and payable and proceed against the collateral securing that
debt, which could constitute all or substantially all of our assets. The March 2017 agreements are each subject to the satisfaction
of a due diligence review by the lender. Each of the parties to each loan agreement must agree on the terms of the final documentation,
and the amendment of each loan agreement is a condition precedent to the amendment of each other loan agreement. Further, it is
a condition to the March 2017 agreement reached with DVB Bank SE that the amendment to the DVB Loan Agreement be completed by April
18, 2017, subject to a reasonable extension at the bank’s discretion.



20







See “Item 5.B Liquidity and Capital
Resources – Indebtedness.”



All our loan arrangements with third parties
(that is, all of our loan arrangements other than the Firment Credit Facility and the Silaner Credit Facility, which are both
affiliates of our chairman Mr. George Feidakis) contain cross-default provisions that provide that if we are in default under
any of our loan arrangements, the lender of another loan arrangement can declare a default under its other loan arrangement, which
could result in our default of all of our loan arrangements. Because of the presence of cross-default provisions in these loan
arrangements, the refusal of any lender to grant or extend a relaxation or waiver could result in most of our indebtedness being
accelerated, notwithstanding that other lenders have relaxed or waived covenant defaults under their respective loan arrangements.



Restrictive covenants in the DVB Loan
Agreement and the HSH Loan Agreement may impose financial and other restrictions on us, including cross-default provisions, and
we cannot assure you that we will be able to borrow funds from future debt arrangements.



The DVB Loan Agreement and the HSH Loan Agreement
impose operating and financial restrictions on us. These restrictions may limit our ability to, among other things:



| | Ø | create or permit liens on our assets;
| | - | -------------------------------------



| | Ø | engage in mergers or consolidations;
| | - | ------------------------------------



| | Ø | change the flag or classification society of our vessels;
| | - | ---------------------------------------------------------



| | Ø | pay dividends; and
| | - | ------------------



| | Ø | change the management of our vessels.
| | - | -------------------------------------



These restrictions could limit our ability
to finance our future operations or capital needs, make acquisitions or pursue available business opportunities. In addition,
the DVB Loan Agreement and the HSH Loan Agreement will, and future credit arrangements will likely, require us to maintain specified
financial ratios and satisfy financial covenants during the remaining terms of such agreements, some of which are based upon the
market value of our fleet. If the market value of our fleet declines sharply, we may not be in compliance with certain provisions
of the DVB Loan Agreement and the HSH Loan Agreement, and we may not be able to refinance our debt or obtain additional financing.
The market value of dry bulk vessels is sensitive, among other things, to changes in the dry bulk charter market, with vessel
values deteriorating in times when dry bulk charter rates are falling and improving when charter rates are anticipated to rise.
The current low charter rates in the dry bulk market, along with the oversupply of dry bulk carriers and the prevailing difficulty
in obtaining financing for vessel purchases, have adversely affected dry bulk vessel values, including the vessels in our fleet.
As a result, we may not meet certain minimum asset coverage ratios and other financial ratios which are included in our loan arrangements.



For a more detailed discussion on our loan
covenants, including breaches of them and relaxations and/or waivers we obtained, see “Item 5.B Liquidity and Capital Resources—Indebtedness.”



Events beyond our control, including changes
in the economic and business conditions in the shipping sectors in which we operate, may affect our ability to comply with these
covenants. We cannot assure you that we will satisfy these requirements or that our lenders will remediate or waive any failure
to do so.



If an event of default occurs under the DVB
Loan Agreement or the HSH Loan Agreement the respective lender could elect to declare the outstanding debt, together with accrued
interest and other fees, to be immediately due and payable and proceed against the collateral securing that debt, which could
constitute all or substantially all of our assets.



21







Furthermore, each of our outstanding loan arrangements
with third parties contains a cross-default provision that may be triggered by a default under any of our other loans. (This excludes
the unsecured credit facilities with Firment Trading Limited and Silaner Investments Limited, as both lenders are affiliates of
our Chairman Mr. George Feidakis, and both of these facilities have no debt outstanding on the date of this annual report, but
remain available to the Company). A cross-default provision means that a default on one loan could result in a default on all of
our other loans. Because of the presence of cross-default provisions in these secured loan arrangements, the refusal of any one
lender to grant or extend a relaxation or waiver could result in most of our indebtedness being accelerated even if our other secured
lenders have relaxed or waived covenant defaults under their respective loan arrangements. If our indebtedness is accelerated,
it will be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and
we could lose our vessels if our lenders foreclose their liens, and our ability to conduct our business would be severely impaired.



Our discretion is limited because we may need
to obtain consent from our lenders in order to engage in certain corporate actions. Our lenders’ interests may be different
from ours, and we cannot guarantee that we will be able to obtain our lenders’ consent when needed. This may limit our ability
to pay dividends to our shareholders, finance our future operations or pursue business opportunities.



Our shareholders were significantly diluted
by virtue of the February 2017 private placement and loan amendment agreements. It is unclear whether the full ramifications of
those transactions have been reflected in our stock price.



In February 2017 we issued
in the aggregate 25 million common shares and warrants to issue an additional 32,380,017 common shares in exchange for $20 million
of debt release and $5 million in cash. Prior to such issuance, a total of 2,627,674 common shares were issued and outstanding.
Our share price has not proportionately decreased to reflect the additional number of common shares that are issued and issuable
pursuant to exercise of the warrants, and it remains to be seen how the market will perceive this change in our increased number
of shares. If the market views these transactions negatively, our share price could substantially depreciate.



Our stock price has been volatile and
no assurance can be made that it will not substantially depreciate.



Our stock price has been
volatile recently. The closing price of our common shares within the past 18 months has ranged from a low of $0.30 on January 29,
2016 to a peak of $14.23 on November 16, 2016. Adjusting for the 4:1 stock split we effected on October 20, 2016, this represents
a 4,643% increase from January 29, 2016. Our opening stock price as of the date immediately prior to the filing of this annual
report on Form 20-F, was $3.43. We can offer no comfort or assurance that our stock price will stop being volatile or not substantially
depreciate.



Our existing shareholders will be diluted
each time our outstanding warrants are exercised.



After we issued the warrants,
our warrant holders had the right to purchase an aggregate of 32,380,017 common shares. The number of common shares issuable upon
exercise and price of exercise are subject to adjustment. We expect the exercise of such outstanding warrants to dilute the value
of our shares.



A substantial number of common
shares were sold in the February 2017 private placement and related loan amendment agreements, and we cannot predict if and when
the holders of those securities may sell such shares in the public markets. Furthermore, in the future, we may issue additional
common shares or other equity or debt securities convertible into common shares in connection with a financing, acquisition, litigation
settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution to our existing shareholders
and could cause our stock price to decline.



The sale of a substantial amount of our
common shares, including resale of the common shares issuable upon the exercise of the warrants held by the warrant holders, in
the public market could adversely affect the prevailing market price of our common shares.



Our warrant holders hold
outstanding warrants to purchase an aggregate of 32,380,017 common shares at an exercise price of $1.60 per share and 5 million
shares. Both the number of common shares issuable upon exercise of the warrants and the exercise price are subject to adjustment.
Sales of substantial amounts of our common shares in the public market, or the perception that such sales might occur, could adversely
affect the market price of our common shares, and the market value of our other securities.



We cannot predict if and
when the warrant holders may sell such shares in the public markets, but note that they hold a substantial amount of shares and
such sales could cause our stock price to be volatile and could cause our shareholders to be diluted. Furthermore, in the future,
we may issue additional common shares or other equity or debt securities convertible into common shares in connection with a financing,
acquisition, litigation settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution
to our existing shareholders and could cause our stock price to decline.



22







Certain shareholders hold registration
rights, which may have an adverse effect on the market price of our common shares.



In connection with the February
8, 2017 transactions, we issued to Firment Shipping Inc., a company owned by our Chairman Mr. George Feidakis, 20 million common
shares and warrants to purchase 7,380,017 common shares. Firment Shipping Inc. has the right to register those common shares for
resale pursuant to a registration rights agreement we entered into with its affiliate, Firment Trading Limited. The resale of those
common shares in addition to the offer and sale of the other securities sold in the February 2017 private placement (including
shares issuable upon exercise of warrants sold in that private placement) may have an adverse effect on the market price of our
common shares.



Our warrants could have cashless exercise
at our expense if, six months after the warrants were issued, the underlying common shares issuable upon exercise of the warrants
are not registered for sale pursuant to an effective registration statement.



Our warrants all contain
a provision whereby the warrant’s holder has the right to a cashless exercise if, six months after their issuance, a registration
statement covering their resale is not effective. If for any reason we are unable to keep such a registration statement active
and our share price is higher than the $1.60 exercise price, we could be required to issue shares without receiving cash consideration.
As 32,380,017 common shares are issuable upon exercise of the warrants, this could mean that we issue all such shares but do not
receive $51,808,027.20 (which is the $1.60 exercise price multiplied by 32,380,017), which would dilute our shareholders and likely
decrease our share price.



If we are unable to deliver common shares
free of restrictive legends where required, we must make whole any purchaser who loses money by purchasing common shares on the
market to complete a trade.



The warrants and the purchase
agreement pursuant to which the warrants were issued require us, within the later of (a) five full trading days of the exercise
of a warrant and (b) three full trading days after receipt of the purchase price for such exercised warrants, to issue common shares,
which, where called for therein, must be free of restrictive legends. We are similarly obligated, where called for therein, to
remove restrictive legends from the 5 million common shares issued to purchasers in the February 2017 Transactions. If we are unable
to deliver proof that the above has occurred when required and if a warrant or shareholder has traded the common shares that we
have failed to deliver unlegended, penalty provisions of these documents require us to make whole any warrant holder or shareholder
who loses money by purchasing shares on the common market to complete its trade. Depending on our share price during this time
and the number of shares to which the payments relate, we could be required to pay a substantial sum.



We cannot assure you that we will be
able to refinance our existing indebtedness or obtain additional financing.



We may finance future fleet expansion with
additional secured indebtedness. While we may refinance amounts drawn under the DVB Loan Agreement or the HSH Loan Agreement, the
Firment Credit Facility or Silaner Credit Facility or secure new debt facilities with the net proceeds of future debt and equity
offerings, we cannot assure you that we will be able to do so at an interest rate or on terms that are acceptable to us or at all.
Our ability to obtain bank financing or to access the capital markets for future offerings may be limited by our financial condition
at the time of any such financing or offering, including the actual or perceived credit quality of our charterers and the market
value of our fleet, as well as by adverse market conditions resulting from, among other things, general economic conditions, weakness
in the financial markets and contingencies and uncertainties that are beyond our control. Significant contraction, de-leveraging
and reduced liquidity in credit markets worldwide is reducing the availability and increasing the cost of credit.



If we are not able to refinance the DVB Loan
Agreement, the HSH Loan Agreement, the Firment Credit Facility and the Silaner Credit Facility or obtain new debt financing on
terms acceptable to us, we will have to dedicate a portion of our cash flow from operations to pay the principal and interest of
this indebtedness. If we are not able to satisfy these obligations, we may have to undertake alternative financing plans. In addition,
debt service payments under the DVB Loan Agreement, the HSH Loan Agreement, the Firment Credit Facility and the Silaner Credit
Facility or alternative financing may limit funds otherwise available for working capital, capital expenditures, the payment of
dividends and other purposes. Our inability to obtain additional or replacement financing at anticipated costs or at all may materially
affect our results of operation, our ability to implement our business strategy, our payment of dividends and our ability to continue
as a going concern.



23







Our common shares may be delisted from Nasdaq, which could
affect their market price and liquidity.



We are required to meet certain qualitative
and financial tests (including a minimum bid price for our common shares of $1.00 per share, at least 500,000 publicly held shares,
at least 300 public holders, and a market value of publicly held securities of $1 million), as well as other corporate governance
standards, to maintain the listing of our common shares on the Nasdaq Capital Market. It is possible that we could fail to satisfy
one or more of these requirements. There can be no assurance that we will be able to maintain compliance with the minimum bid price,
shareholders’ equity, number of publicly held shares or other listing standards in the future. We may receive notices from
Nasdaq that we have failed to meet its requirements, and proceedings to delist our stock could be commenced. In such event, Nasdaq
rules permit us to appeal any delisting determination to a Nasdaq Hearings Panel. If we are unable to maintain or regain compliance
in a timely manner and our common shares are delisted, it could be more difficult to buy or sell our common shares and obtain accurate
quotations, and the price of our shares could suffer a material decline. Delisting may also impair our ability to raise capital.
Delisting of our shares would breach a number of our credit facilities and loan arrangements, some of which contain cross default
provisions. There could also be adverse tax consequences—please read “Item 10.E Taxation – United States Tax
Considerations - United States Federal Income Taxation of United States Holders – Distributions” for further information.



In October 2015, when the Company’s common
shares traded on the Nasdaq Global Market, the Company received written notification from the Nasdaq Stock Market dated October
22, 2015 indicating that because the market value of the Company's publicly held common stock ("MVPHS") for the previous
30 consecutive business days was below the minimum requirement of $5,000,000, the Company no longer met the minimum MVPHS continued
listing requirement for the Nasdaq Global Market, as set forth in the Nasdaq Listing Rule 5450(b)(1)(C). Pursuant to Nasdaq Listing
Rule 5810(c)(3)(D), the Company was granted a grace period of 180 calendar days (or until April 19, 2016) to regain compliance
with Nasdaq's MVPHS requirement. Furthermore, in November 2015, the Company received written notification from the Nasdaq Stock
Market dated November 9, 2015 indicating that because the closing bid price of the Company’s common stock for the previous
30 consecutive business days was below $1.00 per share, the Company no longer met the minimum bid price continued listing requirement
for the Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to Nasdaq Listing Rules, the applicable
grace period to regain compliance was 180 days, or until May 9, 2016. Subsequent to these two events the Company monitored closely
both its MVPHS and closing bid price and looked into ways of curing both deficiencies. The Company transferred from the Nasdaq
Global Market to the Nasdaq Capital Market, where the MVPHS requirement is only $1,000,000 and commenced trading on the Nasdaq
Capital Market on April 11, 2016.



On May 9, 2016 the Company
received a written notification from Nasdaq confirming its eligibility for a second grace period of 180 days, lasting until November
9, 2016 to regain compliance with its minimum $1.00 per share closing bid price requirement. On October 20, 2016, we effected
a four-for-one reverse stock split which reduced the number of our outstanding common shares from 10,510,741 to 2,627,674 shares
(adjustments were made based on fractional shares). On November 3, 2016 received a letter from NASDAQ, indicating that the Company
has regained compliance with the $1.00 per share minimum closing bid price requirement for continued listing on the NASDAQ Capital
Market, pursuant to the NASDAQ marketplace rules. For at least 10 consecutive business days from October 20, to November 2, 2016,
the closing bid price had been greater than $1.00. NASDAQ indicated within its letter that since the Company has regained compliance
with Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”), the matter had closed. We can offer no reassurance that
we will not receive similar letters in the future.



We may be unable to successfully employ
our vessels on long-term time charters or take advantage of favorable opportunities involving short-term or spot market charter
rates.



Our strategy involves employing our vessels
primarily on time charters generally with durations between three months and five years. As of December 31, 2016, all of our vessels
were employed on short-term time charters or on spot charters. Although time charters with durations of one to five years may provide
relatively steady streams of revenue, if our vessels were committed to such charters they may not be available for re-chartering
or for spot market voyages when such employment would allow us to realize the benefits of comparably more favorable charter rates.
In addition, in the future, we may not be able to enter into new time charters on favorable terms. The market is volatile, and
in the past charter rates have declined below operating costs of vessels and such is currently the case. If we are required to
enter into a charter when charter rates are low, employ our vessels on the spot market during periods when charter rates have fallen
or we are unable to take advantage of short-term opportunities on the spot or charter market, our earnings and profitability could
be adversely affected. We cannot assure you that future charter rates will enable us to operate our vessels profitably or to pay
dividends, or both.



We may also decide that it makes economic sense
to lay up one or more vessels. While our vessels are laid up, we will pay lay-up costs, but those vessels will not be able to earn
any hire.



24







As we expand our business, we may have
difficulty improving our operating and financial systems and recruiting suitable employees and crew for our vessels.



Our current operating and financial systems
may not be adequate if we expand the size of our fleet, and our attempts to improve those systems may be ineffective. In addition,
as we seek to expand our internal technical management capabilities and our fleet, we or our crewing agents may need to recruit
suitable additional seafarers and shore based administrative and management personnel. We cannot guarantee that we or our crewing
agents will be able to hire suitable employees or a sufficient number of employees if and as we expand our fleet. If we or our
crewing agent encounter business or financial difficulties, we may not be able to adequately staff our vessels. If we are unable
to develop and maintain effective financial and operating systems or to recruit suitable employees as we expand our fleet, our
financial performance may be adversely affected and, among other things, the amount of cash available for distribution as dividends
to our shareholders may be reduced or eliminated.



Recently, the limited supply of and increased
demand for well-qualified crew, due to the increase in the size of the global shipping fleet, has created upward pressure on crewing
costs, which we generally bear under our time and spot charters. Increases in crew costs may adversely affect our profitability,
results of operations, cash flows, financial condition and ability to pay dividends.



The smuggling of drugs or other contraband
onto our vessels may lead to governmental claims against us.



We expect that our vessels will call at ports
where smugglers may attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the
extent that our vessels are found with contraband, whether inside or attached to the hull of our vessel, and whether with or without
the knowledge of any of our crew, we may face governmental or other regulatory claims that could have an adverse effect on our
business, results of operations, cash flows, financial condition and ability to pay dividends.



Labor interruptions could disrupt our
business.



Our vessels are manned by masters, officers
and crews (totaling 113 as of December 31, 2016). Seafarers manning the vessels in our fleet are covered by industry-wide collective
bargaining agreements that set basic standards. Any labor interruptions or employment disagreements with our crew members could
disrupt our operations and could have a material adverse effect on our business, results of operations, cash flows, financial condition
and ability to pay dividends. We cannot assure you that collective bargaining agreements will prevent labor interruptions.



Our charterers may renegotiate or default
on their charters.



Our charters provide the charterer the right
to terminate the charter on the occurrence of stated events or the existence of specified conditions. In addition, the ability
and willingness of each of our charterers to perform its obligations under its charter with us will depend on a number of factors
that are beyond our control. These factors may include general economic conditions, the condition of the dry bulk shipping industry
and the overall financial condition of the counterparties. The costs and delays associated with the default of a charterer of a
vessel may be considerable and may adversely affect our business, results of operations, cash flows, financial condition and ability
to pay dividends.



In the recent depressed dry bulk market conditions,
there have been numerous reports of charterers renegotiating their charters or defaulting on their obligations under their charters.
If a current or future charterer defaults on a charter, we will seek the remedies available to us, which may include arbitration
or litigation to enforce the contract, although such efforts may not be successful and for short term charters may cost more to
enforce than the potential recovery. We cannot predict whether our charterers will, upon the expiration of their charters, re-charter
our vessels on favorable terms or at all. If our charterers decide not to re-charter our vessels, we may not be able to re-charter
them on terms similar to the terms of our current charters or at all. If we receive lower charter rates under replacement charters
or are unable to re-charter all of our vessels, this may adversely affect our business, results of operations, cash flows, financial
condition and ability to pay dividends.



25







The aging of our fleet may result in
increased operating costs in the future.



In general, the cost of maintaining a vessel
in good operating condition increases with the age of the vessel. As of December 31, 2016 and 2015, the weighted average age of
the vessels in our fleet was 8.8 and 7.4 years, respectively. Our oldest vessel was built in 2005, and our youngest vessel was
built in 2010. As our fleet ages, we will incur increased costs. Older vessels are typically less fuel efficient and more costly
to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates, paid by charterers,
increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations, safety or other
equipment standards related to the age of vessels may require expenditures for alterations or the addition of new equipment, to
our vessels and may restrict the type of activities in which our vessels may engage. We cannot assure you that, as our vessels
age, further market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder
of their useful lives. We may also decide that it makes economic sense to lay up one or more vessels. While our vessels are laid
up, we will pay lay-up costs, but those vessels will not be able to earn any hire.



We may have difficulty managing our planned
growth properly.



Any future acquisitions of additional vessels
will impose additional responsibilities on our management and staff and may require us to increase the number of our personnel.
In the event of a future acquisition of additional vessels, we will also have to increase our customer base to provide continued
employment for the new vessels.



We intend to continue to stabilize and then
to try to grow our business through disciplined acquisitions of vessels that meet our selection criteria and newly built vessels
if we can negotiate attractive purchase prices. Our future growth will primarily depend on:



| | Ø | locating and acquiring suitable vessels;
| | - | ----------------------------------------



| | Ø | identifying and consummating acquisitions;
| | - | ------------------------------------------



| | Ø | enhancing our customer base;
| | - | ----------------------------



| | Ø | managing our expansion; and
| | - | ---------------------------



| | Ø | obtaining required financing on acceptable terms.
| | - | -------------------------------------------------



A delay in the delivery to us of any such vessel,
or the failure of the shipyard to deliver a vessel at all, could cause us to breach our obligations under a related charter and
could adversely affect our earnings. In addition, the delivery of any of these vessels with substantial defects could have similar
consequences. A shipyard could fail to deliver a new-building on time or at all because of:



| | Ø | work stoppages or other hostilities or political or economic disturbances that disrupt the operations of the shipyard;
| | - | ----------------------------------------------------------------------------------------------------------------------



| | Ø | quality or engineering problems;
| | - | --------------------------------



| | Ø | bankruptcy or other financial crisis of the shipyard;
| | - | -----------------------------------------------------



| | Ø | a backlog of orders at the shipyard;
| | - | ------------------------------------



| | Ø | weather interference or catastrophic events, such as major earthquakes or fires;
| | - | --------------------------------------------------------------------------------



| | Ø | our requests for changes to the original vessel specifications or disputes with the shipyard;
| | - | ---------------------------------------------------------------------------------------------



| | Ø | shortages of or delays in the receipt of necessary construction materials, such as steel; or
| | - | --------------------------------------------------------------------------------------------



| | Ø | shortages of or delays in the receipt of necessary equipment, such as main engines, electricity generators and propellers.
| | - | --------------------------------------------------------------------------------------------------------------------------



In addition, if we enter a new-building or
secondhand contract in the future, we may seek to terminate the contract due to market conditions, financing limitations or other
reasons. The outcome of contract termination negotiations may require us to forego deposits on construction or purchase and pay
additional cancellation fees. In addition, where we have already arranged a future charter with respect to the terminated new-building
contract, we would need to provide an acceptable substitute vessel to the charterer to avoid breaching our charter agreement.



26







During periods in which charter rates are high,
vessel values generally are high as well, and it may be difficult to consummate vessel acquisitions or enter into new-building
contracts at favorable prices. During periods when charter rates are low, such as the current market, we may be unable to fund
the acquisition of new-buildings, whether through lending or cash on hand. For these reasons, we may be unable to execute our growth
plans or avoid significant expenses and losses in connection with our future growth efforts.



Growing any business by acquisition presents
numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnification agreements will be unenforceable
or insufficient to cover potential losses and difficulties associated with imposing common standards, controls, procedures and
policies, obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets
and operations into existing infrastructure. We cannot give any assurance that we will be successful in executing our growth plans
or that we will not incur significant expenses and losses in connection with our future growth.



To the extent we scrap or sell vessels, we
may decide to terminate the employment of some of our staff.



Legislative or regulatory changes in
Greece may adversely affect our results from operations.



Globus Shipmanagement Corp., our ship management
subsidiary, who we refer to as our Manager, is regulated under Greek Law 89/67, and conducts its operations and those on our behalf
primarily in Greece. Greece has been implementing new legislative measures to address financial difficulties, several of which
as a response from oversight by the International Monetary Fund and by European regulatory bodies such as the European Central
Bank. Such legislative actions may impose new regulations on our operations in Greece that will require us to incur new or additional
compliance or other administrative costs and may require that our Manager or we pay to the Greek government new taxes or other
fees. Any such taxes, fees or costs we incur could be in amounts that are significantly greater than those in the past and could
adversely affect our results from operations.



For example, in January 2013, tax law 4110/2013
amended the long-standing provisions of art. 26 of law 27/1975 by imposing a fixed annual tonnage tax on vessels flying a foreign
(i.e., non-Greek) flag which are managed by a Law 89 company, establishing an identical tonnage tax regime as the one already in
force for vessels flying the Greek flag. This tax varies depending on the size of the vessel, calculated in gross registered tonnage,
as well as on the age of each vessel. Payment of this tonnage tax completely satisfies all income tax obligations of both the shipowning
company and of all its shareholders up to the ultimate beneficial owners. Any tax payable to the state of the flag of each vessel
as a result of its registration with a foreign flag registry (including the Marshall Islands) is subtracted from the amount of
tonnage tax due to the Greek tax authorities.



The Greek crisis could adversely affect
the operations of our fleet manager, which has offices in Greece.



Globus Shipmanagement Corp., our Manager, has
an office in Greece. As a result of the ongoing economic slump in Greece and the capital controls imposed by the government in
June 2015, our Manager may be subjected to new regulations that may require us to incur new or additional compliance or other administrative
costs and may require that we pay to the Greek government new taxes or other fees. Furthermore, renewed political uncertainty and
social unrest due to the worsening economic conditions and the growing refugee population in the country may undermine Greece's
political and economic stability and may lead it to exit the Eurozone, which may adversely affect the operations of our Manager
located in Greece. We also face the risk that enhanced capital controls, strikes, work stoppages, civil unrest and violence within
Greece may disrupt the operations of our Manager.



We rely on our information systems to
conduct our business.



The efficient operation of our business is
dependent on computer hardware and software systems. Information systems are vulnerable to security breaches by computer hackers
and cyber terrorists. We rely on what we believe to be industry accepted security measures and technology to securely maintain
confidential and proprietary information maintained on our information systems. However, these measures and technology may not
adequately prevent security breaches. In addition, the unavailability of the information systems or the failure of these systems
to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating
costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems
or any significant breach of security could adversely affect our business and results of operations.



27







We expect that a limited number of financial
institutions will hold our cash including financial institutions that may be located in Greece.



We expect that a limited number of financial
institutions will hold all of our cash, including some institutions located in Greece. Our bank accounts are with banks in Switzerland,
Germany and Greece. Of the financial institutions located in Greece, none are subsidiaries of international banks. We do
not expect that these balances will be covered by insurance in the event of default by these financial institutions. The occurrence
of such a default could have a material adverse effect on our business, financial condition, results of operations and cash flows,
and we may lose part or all of our cash that we deposit with such banks.



Purchasing and operating secondhand vessels
may result in increased operating costs and reduced fleet utilization.



While we have the right to inspect previously
owned vessels prior to our purchase of them, such an inspection does not provide us with the same knowledge about their condition
that we would have if these vessels had been built for and operated exclusively by us. A secondhand vessel may have conditions
or defects that we are not aware of when we buy the vessel and which may require us to incur costly repairs to the vessel. These
repairs may require us to put a vessel into drydocking, which would increase cash outflows and related expenses, while reducing
our fleet utilization. Furthermore, we usually do not receive the benefit of warranties on secondhand vessels.



Our ability to declare and pay dividends
to holders of our common shares will depend on a number of factors and will always be subject to the discretion of our board of
directors.



If we are not in compliance with our loan covenants
and received a notice of default and were unable to cure it under the terms of our loan covenants, we may be forbidden from issuing
dividends. There can be no assurance that dividends will be paid to holders of our shares in any anticipated amounts and frequency
at all. Our policy is, to the extent permitted by law and applicable contractual obligations, to declare and pay to holders of
our shares a variable quarterly dividend in excess of 50% of the net income of the previous quarter subject to any reserves our
board of directors may from time to time determine are required. However, we may incur other expenses or liabilities that would
reduce or eliminate the cash available for distribution as dividends, including as a result of the risks described in this section
of this annual report on Form 20-F. The DVB Loan Agreement and the HSH Loan Agreement also prohibit our declaration and payment
of dividends under some circumstances. Under each of the DVB Loan Agreement and the HSH Loan Agreement we will be prohibited from
paying dividends if an event of default has occurred or any event has occurred or circumstance arisen which with the giving of
notice or the lapse of time or the satisfaction of any other condition would constitute an event of default under the DVB Loan
Agreement and the HSH Loan Agreement. Please read “Item 5.B. Liquidity and Capital Resources—Indebtedness” for
further information. We may also enter into new financing or other agreements that may restrict our ability to pay dividends. In
addition, we may pay dividends to the holders of our preferred shares prior to the holders of our common shares, depending on the
terms of the preferred shares.



The declaration and payment of dividends to
holders of our shares will be subject at all times to the discretion of our board of directors, and will be paid equally on a per-share
basis between our common shares and our Class B shares, to the extent any are issued and outstanding. We can provide no assurance
that dividends will be paid in the future.



There may be a high degree of variability from
period to period in the amount of cash, if any, that is available for the payment of dividends based upon, among other things:



| | Ø | the rates we obtain from our charters as well as the rates obtained upon the expiration of our existing charters;
| | - | -----------------------------------------------------------------------------------------------------------------



| | Ø | the level of our operating costs;
| | - | ---------------------------------



| | Ø | the number of unscheduled off-hire days and the timing of, and number of days required for, scheduled drydocking of our vessels;
| | - | --------------------------------------------------------------------------------------------------------------------------------



| | Ø | vessel acquisitions and related financings;
| | - | -------------------------------------------



| | Ø | restrictions in the DVB Loan Agreement and the HSH Loan Agreement and in any future debt arrangements;
| | - | ------------------------------------------------------------------------------------------------------



| | Ø | our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy;
| | - | -----------------------------------------------------------------------------------------------------------



28







| | Ø | prevailing global and regional economic and political conditions;
| | - | -----------------------------------------------------------------



| | Ø | the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business;
| | - | --------------------------------------------------------------------------------------------------------------------------



| | Ø | our overall financial condition;
| | - | --------------------------------



| | Ø | our cash requirements and availability;
| | - | ---------------------------------------



| | Ø | the amount of cash reserves established by our board of directors; and
| | - | ----------------------------------------------------------------------



| | Ø | restrictions under Marshall Islands law.
| | - | ----------------------------------------



Marshall Islands law generally prohibits the
payment of dividends other than from surplus or certain net profits, or while a company is insolvent or would be rendered insolvent
by the payment of such a dividend. We may not have sufficient funds, surplus, or net profits to make distributions.



We may incur expenses or liabilities or be
subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution
as dividends, if any. Our growth strategy contemplates that we will finance the acquisition of our new-buildings or selective acquisitions
of vessels through a combination of our operating cash flow and debt financing through our subsidiaries or equity financing. If
financing is not available to us on acceptable terms, our board of directors may decide to finance or refinance acquisitions with
a greater percentage of cash from operations to the extent available, which would reduce or even eliminate the amount of cash available
for the payment of dividends. We may also enter into other agreements that will restrict our ability to pay dividends.



The amount of cash we generate from our operations
may differ materially from our net income or loss for the period, which will be affected by non-cash items. We may incur other
expenses or liabilities that could reduce or eliminate the cash available for distribution as dividends. As a result of these and
the other factors mentioned above, we may pay dividends during periods when we record losses and may not pay dividends during periods
when we record net income, if we pay dividends at all.



We are a holding company, and we will
depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or to make dividend
payments.



We are a holding company and our subsidiaries,
which are all directly and wholly owned by us, will conduct all of our operations and own all of our operating assets. We have
no significant assets other than the equity interests in our wholly owned subsidiaries. As a result, our ability to make dividend
payments depends on our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries,
our board of directors may exercise its discretion not to declare or pay dividends. In addition, our subsidiaries are subject to
limitations on the payment of dividends under Marshall Islands or Maltese law.



Management may be unable to provide reports
as to the effectiveness of our internal control over financial reporting or our independent registered public accounting firm may
be unable to provide us with unqualified attestation reports as to the effectiveness of our internal control over financial reporting.



Under Section 404 of the Sarbanes-Oxley Act
of 2002, which we refer to as Sarbanes-Oxley, we are required to include in each of our annual reports on Form 20-F a report containing
our management’s assessment of the effectiveness of our internal control over financial reporting and we may also be required
to include, in our future annual reports, a related attestation of our independent registered public accounting firm. Our Manager,
Globus Shipmanagement, will provide substantially all of our financial reporting, and we will depend on the procedures it has in
place. If in such annual reports on Form 20-F our management cannot provide a report as to the effectiveness of our internal control
over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified attestation
report as to the effectiveness of our internal control over financial reporting as required by Section 404, investors could lose
confidence in the reliability of our consolidated financial statements, which could result in a decrease in the value of our common
shares.



29







Unless we set aside reserves or are able
to borrow funds for vessel replacement, at the end of a vessel’s useful life our revenues will decline.



As of December 31, 2016 and December 31, 2015,
the vessels in our current fleet had a weighted average age of 8.8 and 7.4 years, respectively. Our oldest vessel was built in
2005, and our youngest vessel was built in 2010. Unless we maintain reserves or are able to borrow or raise funds for vessel replacement,
we will be unable to replace the vessels in our fleet upon the expiration of their remaining useful lives, which we expect to be
25 years from the date of their construction. Our cash flows and income are dependent on the revenues earned by the chartering
of our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our
business, results of operations, financial condition and ability to pay dividends will be materially adversely affected. Any reserves
set aside for vessel replacement may not be available for dividends.



Investments in derivative instruments
such as forward freight agreements could result in losses.



From time to time, we may take positions in
derivative instruments including forward freight agreements, or FFAs. FFAs and other derivative instruments may be used to hedge
a vessel owner’s exposure to the charter market by providing for the sale of a contracted charter rate along a specified
route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by
an identified index, for the specified route and time period, the seller of the FFA is required to pay the buyer an amount equal
to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period.
Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement
sum. If we take positions in FFAs or other derivative instruments and do not correctly anticipate charter rate movements over the
specified route and time period, we could suffer losses in the settling or termination of the FFA. This could adversely affect
our results of operations, cash flow and ability to pay dividends.



We depend upon a few significant customers
for a large part of our revenues.



We may derive a significant part of our revenue
from a small number of customers. During the years ended December 31, 2016, 2015 and 2014, we derived substantially all of our
revenues from approximately 29, 32 and 33 customers, respectively, and approximately 36%, 36% and 54%, respectively, of our revenues
during those years, were derived from four customers. If one or more of our major customers defaults under a charter with us and
we are not able to find a replacement charter, or if such a customer exercises certain rights to terminate the charter, we could
suffer a loss of revenues that could materially adversely affect our business, financial condition, results of operations and cash
available for distribution as dividends to our shareholders.



We could lose a customer or the benefits of
a time charter if, among other things:



| | Ø | the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise;
| | - | -------------------------------------------------------------------------------------------------------------------



| | Ø | the customer terminates the charter because of our non-performance, including failure to deliver the vessel within a fixed period of time, the vessel is lost or damaged beyond repair, serious deficiencies in the vessel, prolonged periods of off-hire or our default under the charter; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | the customer terminates the charter because the vessel has been subject to seizure for more than 30 days.
| | - | ---------------------------------------------------------------------------------------------------------



If we lose a key customer, we may be unable
to obtain charters on comparable terms with charterers of comparable standing or we may have increased exposure to the volatile
spot market, which is highly competitive and subject to significant price fluctuations. We would not receive any revenues from
such a vessel while it remained unchartered, but we may be required to pay expenses necessary to maintain the vessel in proper
operating condition, insure it and service any indebtedness secured by such vessel. The loss of any of our customers, time charters
or vessels or a decline in payments under our charters could have a material adverse effect on our business, results of operations
and financial condition and our ability to pay dividends.



In addition, we are earning consulting fees
from an affiliated ship-management company. If this agreement is terminated we will no longer receive consulting fees.

30







We will earn income in 2017 by providing
consulting services.



We currently earn $1,000 per day by providing
consulting services to an affiliated ship-management company, which agreement has a one year term. If this agreement is terminated
we will no longer receive consulting fees for these services. The loss of this revenue could negatively impact us and our results
of operations.



Provisions of our articles of incorporation
and bylaws may have anti-takeover effects.



Several provisions of our articles of incorporation
and bylaws, which are summarized below, may have anti-takeover effects. These provisions are intended to avoid costly takeover
battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize
shareholder value in connection with any unsolicited offer to acquire our company. However, these anti-takeover provisions could
also discourage, delay or prevent the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise
that a shareholder may consider in its best interest and the removal of incumbent officers and directors.



Multi Class Stock. Our multi-class stock
structure, which consists of common shares, Class B shares, and preferred shares, can provide holders of our Class B shares or
preferred shares a significant degree of control over all matters requiring shareholder approval, including the election of directors
and significant corporate transactions, such as a merger or other sale of our company or its assets, because our different classes
of shares can have different numbers of votes. For instance, our articles of incorporation grant 20 votes to each Class B share,
as compared to one vote per common share; although no Class B shares are currently issued and outstanding, any person who held
Class B shares representing more than 2.5% of the Company’s total issued and outstanding shares could control a majority
of the Company’s votes and would be able to exert substantial control over our management and all matters requiring shareholder
approval, including electing directors and significant corporate transactions, such as a merger. Such holder’s interest could
differ from yours, and the issuance of such shares could decrease the price of our common shares.



Blank Check Preferred Shares. Under
the terms of our articles of incorporation, our board of directors has authority, without any further vote or action by our shareholders,
to issue up to 100 million shares of “blank check” preferred shares. Our board could authorize the issuance of preferred
shares with voting or conversion rights that could dilute the voting power or rights of the holders of common shares. The issuance
of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could,
among other things, have the effect of delaying, deferring or preventing a change in control of us or the removal of our management
and may harm the market price of our common shares.



Classified Board of Directors. Our articles
of incorporation provide for the division of our board of directors into three classes of directors, with each class as nearly
equal in number as possible, serving staggered, three-year terms beginning upon the expiration of the initial term for each class.
Approximately one-third of our board of directors is elected each year. This classified board provision could discourage a third
party from making a tender offer for our shares or attempting to obtain control of us. It could also delay shareholders who do
not agree with the policies of our board of directors from removing a majority of our board of directors for up to two years.



Election of Directors. Our articles
of incorporation do not provide for cumulative voting in the election of directors. Our bylaws require parties, other than the
chairman of the board of directors, board of directors and shareholders holding 30% or more of the voting power of the aggregate
number of our shares issued and outstanding and entitled to vote, to provide advance written notice of nominations for the election
of directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.



Advance Notice Requirements for Shareholder
Proposals and Director Nominations. Our bylaws provide that shareholders, other than shareholders holding 30% or more of the
voting power of the aggregate number of our shares issued and outstanding and entitled to vote, seeking to nominate candidates
for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal
in writing to the corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal
executive offices not less than 150 days or more than 180 days prior to the first anniversary date of the immediately preceding
annual meeting of shareholders. Our bylaws also specify requirements as to the form and content of a shareholder’s notice.
These provisions may impede a shareholder’s ability to bring matters before an annual meeting of shareholders or make nominations
for directors at an annual meeting of shareholders.

31







We generate revenues from the trading
of our vessels in U.S. dollars but incur a portion of our expenses in other currencies.



We generate substantially all of our revenues
from the trading of our vessels in U.S. dollars, but during the years ended December 31, 2016 and 2015 we incurred approximately
28% and 18%, respectively, of our vessel operating expenses, and certain administrative expenses, in currencies other than the
U.S. dollar. This difference could lead to fluctuations in net profit due to changes in the value of the U.S. dollar relative to
the other currencies. Expenses incurred in foreign currencies against which the U.S. dollar falls in value can increase, decreasing
our revenues. We have not hedged our currency exposure, and, as a result, our results of operations and financial condition, denominated
in U.S. dollars, and our ability to pay dividends could suffer.



Increases in interest rates may cause
the market price of our shares to decline.



An increase in interest rates may cause a corresponding
decline in demand for equity investments in general. Any such increase in interest rates or reduction in demand for our shares
resulting from other relatively more attractive investment opportunities may cause the trading price of our shares to decline.
If LIBOR increases, then our payments pursuant to certain existing loans will increase. See “Item 11. Quantitative and Qualitative
Disclosures About Market Risk.”



Our chairman of the board of directors
beneficially owns a majority of our total outstanding common shares and controls matters on which our shareholders are entitled
to vote.



Mr. George Feidakis, the chairman of our board
of directors, beneficially owns a majority of our outstanding common shares as of April 11, 2017. Please read “Item 7.A.
Major Shareholders.” Until such time that we issue a significant number of securities (which would occur upon exercise of
the warrants issued during the February 2017 private placement and loan amendment) to persons other than Mr. George Feidakis or
entities nor beneficially owned by Mr. George Feidakis, or Mr. George Feidakis sells all or a portion of his common shares, Mr.
George Feidakis can control the outcome of matters on which our shareholders are entitled to vote, including the election of directors
and other significant corporate actions. The interests of Mr. George Feidakis may be different from your interests.



The public market may not continue to
be active and liquid enough for you to resell our common shares in the future.



The price of our common shares may be volatile
and may fluctuate due to factors such as:



| | Ø | actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;
| | - | ---------------------------------------------------------------------------------------------------------------------------



| | Ø | mergers and strategic alliances in the dry bulk shipping industry;
| | - | ------------------------------------------------------------------



| | Ø | market conditions in the dry bulk shipping industry;
| | - | ----------------------------------------------------



| | Ø | changes in government regulation;
| | - | ---------------------------------



| | Ø | shortfalls in our operating results from levels forecast by securities analysts;
| | - | --------------------------------------------------------------------------------



| | Ø | announcements concerning us or our competitors; and
| | - | ---------------------------------------------------



| | Ø | the general state of the securities market.
| | - | -------------------------------------------



Furthermore, Mr. George Feidakis, the chairman
of our board of directors, beneficially owns a majority of our outstanding common shares. Please read “Item 7.A. Major Shareholders.”
Where a substantial percentage of the shares of publicly traded companies are held by a small number of shareholders, the shares
may have a lower trading volume than similarly-sized publicly traded companies. Until such time as we issue a significant number
of securities (which would occur upon exercise of the warrants issued during the February 2017 private placement and loan amendment)
to persons other than Mr. George Feidakis or entities nor beneficially owned by Mr. George Feidakis, or Mr. George Feidakis sells
all or a portion of his common shares, we may have a lower trading volume than similarly-sized companies, which means shareholders
who buy or sell relatively small amounts of our common shares could have a disproportionately large impact on our share price,
either positively or negatively, and could thus make our share price more volatile than it otherwise would be. The dry bulk shipping
industry has been highly unpredictable and volatile. The market for common shares in this industry may be equally volatile.



32







We may have to pay tax on U.S. source
shipping income.



Under the U.S. Internal Revenue Code of 1986,
as amended, or the Code, 50% of the gross shipping income of a vessel-owning or chartering company that is attributable to transportation
that begins or ends, but that does not both begin and end, in the United States is characterized as U.S. source shipping income
and such income is subject to a 4% U.S. federal income tax without allowance for deductions, unless that corporation qualifies
for exemption from tax under section 883 of the Code and the U.S. Treasury regulations promulgated thereunder, which we refer to
as the Section 883 Exemption or through the application of a comprehensive income tax treaty between the United States and the
corporation’s country of residence. The eligibility of Globus Maritime and our subsidiaries to qualify for the Section 883
Exemption is determined each taxable year and is dependent on certain circumstances related to the ownership of our shares and
on interpretations of existing U.S. Treasury regulations, each of which could change. We can therefore give no assurance that we
will in fact be eligible to qualify for the Section 883 Exemption for all taxable years. In addition, changes to the Code, the
U.S. Treasury regulations or the interpretation thereof by the U.S. Internal Revenue Service, or IRS, or the courts could adversely
affect the ability of Globus Maritime and our subsidiaries to take advantage of the Section 883 Exemption.



If we are not entitled to the Section 883
Exemption or an exemption under a tax treaty for any taxable year in which any company in the group earns U.S. source shipping
income, any company earning such U.S. source shipping income, would be subject to a 4% U.S. federal income tax on the gross amount
of the U.S. source shipping income for the year (or an effective rate of 2% on shipping income attributable to the transportation
of freight to or from the United States). The imposition of this taxation could have a negative effect on our business and revenues
and would result in decreased earnings available for distribution to our shareholders.



For a more complete discussion, please read
the section entitled “Item 10.E. Taxation— United States Tax Considerations— United States Federal Income Taxation
of the Company.”



U.S. tax authorities could treat us as
a “passive foreign investment company,” which could result in adverse U.S. federal income tax consequences to U.S.
shareholders.



A foreign corporation will be treated as a
“passive foreign investment company,” or PFIC, for U.S. federal income tax purposes if either at least 75% of its gross
income for any taxable year consists of certain types of “passive income” or at least 50% of the average value of the
corporation’s assets produce or are held for the production of those types of “passive income.” For purposes
of these tests, “passive income” includes dividends, interest and gains from the sale or exchange of investment property,
and rents and royalties other than rents and royalties that are received from unrelated parties in connection with the active conduct
of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive
income.”



U.S. shareholders of a PFIC are subject to
a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive
from the PFIC, and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC, unless those shareholders
make an election available under the Code (which election could itself have adverse consequences for such shareholders). In particular,
U.S. shareholders who are individuals would not be eligible for the preferential tax rate on qualified dividends. Please read “Item
10.E. Taxation— United States Tax Considerations— United States Federal Income Taxation of United States Holders”
for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.



Based on our current operations and anticipated
future operations, we believe we should not be treated as a PFIC. In this regard, we intend to treat gross income we derive or
are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe
that our income from our time chartering activities should not constitute “passive income,” and that the assets we
own and operate in connection with the production of that income do not constitute assets that produce or are held for the production
of “passive income.”



There are legal uncertainties involved in this
determination, because there is no direct legal authority under the PFIC rules addressing our current and projected future operations.
Moreover, a case decided in 2009 by the U.S. Court of Appeals for the Fifth Circuit held that, contrary to the position of the
IRS in that case, and for purposes of a different set of rules under the Code, income received under a time charter of vessels
should be treated as rental income rather than services income. If the reasoning of this case were extended to the PFIC context,
the gross income we derive or are deemed to derive from our time chartering activities would be treated as rental income, and we
would be a PFIC unless an active leasing exception applies. Although the IRS has announced that it will not follow the reasoning
of this case, and that it intends to treat the income from standard industry time charters as services income, no assurance can
be given that a U.S. court will not follow the aforementioned case. Moreover, no assurance can be given that we would not constitute
a PFIC for any future taxable year if there were to be changes in our assets, income or operations.



33







If the IRS were to find that we are or have
been a PFIC for any taxable year, our U.S. shareholders will face adverse U.S. tax consequences and information reporting obligations,
as more fully described under “Item 10.E. Taxation—United States Tax Considerations—United States Federal Income
Taxation of United States Holders.”



We could face penalties under European
Union, United States or other economic sanctions.



Our business could be adversely impacted if
we are found to have violated economic sanctions under the applicable laws of the European Union, the United States or another
applicable jurisdiction against countries such as Iran, Sudan, Syria, North Korea and Cuba. U.S. economic sanctions, for example,
prohibit a wide scope of conduct, target numerous countries and individuals, are frequently updated or changed and have vague application
in many situations.



Many economic sanctions relate to our business,
including prohibitions on certain kinds of trade with countries, such as exportation or re-exportation of commodities, or prohibitions
against certain transactions with designated nationals who may be operating under aliases or through non-designated companies.
The imposition of Ukrainian-related economic sanctions on Russian persons, first imposed in March 2014, is an example of economic
sanctions with a potentially widespread and unpredictable impact on shipping. Certain of our charterers or other parties with
whom we have entered into contracts regarding our vessels may be affiliated with persons or entities that are the subject of sanctions
imposed by the U.S. government, the European Union and/or other international bodies relating to the annexation of Crimea by Russia
in 2014. If we determine that such sanctions require us to terminate existing contracts or if we are found to be in violation of
such applicable sanctions, our results of operations may be adversely affected or we may suffer reputational harm.



Additionally, the U.S. Iran Threat Reduction
Act (which was signed into law in 2012) amended the Exchange Act to require issuers that file annual or quarterly reports under
Section 13(a) of the Exchange Act to include disclosure in their annual and quarterly reports as to whether the issuer or its affiliates
have knowingly engaged in certain activities prohibited by sanctions against Iran or transactions or dealings with certain identified
persons. We are subject to this disclosure requirement.



There can be no assurance that we will be in
compliance with all applicable sanctions and embargo laws and regulations in the future, particularly as the scope of certain laws
may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties and
could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding,
or being required, to divest their interest, or not to invest, in us. Even inadvertent violations of economic sanctions can result
in the imposition of material fines and restrictions and could adversely affect our business, financial condition and results of
operations, our reputation, and the market price of our common shares.



Our vessels may call on ports subject
to economic sanctions or embargoes.



From time to time on charterers’ instructions,
our vessels may call on ports located in countries subject to sanctions and embargoes imposed by the United States government and
countries identified by the U.S. government as state sponsors of terrorism, such as Iran, Sudan and Syria. The U.S. sanctions and
embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same
activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. On May 1, 2012, President
Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation
of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S.
sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be
banned from all contacts with the United States, including conducting business in U.S. dollars.



On July 14, 2015, the P5+1 (the United States,
United Kingdom, Germany, France, Russia and China) and the EU announced that they reached a landmark agreement with Iran titled
the Joint Comprehensive Plan of Action, or the JCPOA, which is intended to restrict significantly Iran’s ability to develop
and produce nuclear weapons while simultaneously easing sanctions directed at non-U.S. persons for conduct involving Iran, but
taking place outside of U.S. jurisdiction and not involving U.S. persons. On January 16, 2016, the United States joined the EU
and the United Nations in lifting a significant number of sanctions on Iran following an announcement by the International Atomic
Energy Agency, or the IAEA, that Iran had satisfied its obligations under the JCPOA.



34







U.S. sanctions prohibiting certain conduct
that is now permitted under the JCPOA have not actually been repealed or permanently terminated at this time. Rather, the U.S.
government has implemented changes to the sanctions regime by: (1) issuing waivers of certain statutory sanctions provisions; (2)
committing to refrain from exercising certain discretionary sanctions authorities; (3) removing certain individuals and entities
from sanctions lists; and (4) revoking certain Executive Orders and specified sections of Executive Orders. These sanctions will
not be permanently “lifted” until the earlier of October 18, 2023, or upon a report from the IAEA stating that all
nuclear material in Iran is being used for peaceful activities.



Although we believe that we have been in compliance
with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance
that we will be in compliance in the future as such regulations and sanctions may be amended over time, and the U.S. retains the
authority to revoke the aforementioned relief if Iran fails to meet its commitments under the JCPOA. Any such violation could result
in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business,
and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition,
certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies
that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these
investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade.
Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve
us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market
for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals
or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries,
or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those
countries or entities controlled by their governments. Investor perception of the value of our common shares may be adversely affected
by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.



We are subject to Marshall Islands corporations
law, which is not well-developed.



Our corporate affairs are governed by our articles
of incorporation, our bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble
provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the
Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Marshall Islands
are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in
existence in certain United States jurisdictions. The rights of shareholders of corporations incorporated in or redomiciled into
the Marshall Islands may differ from the rights of shareholders of corporations incorporated in the United States. While the BCA
provides that it is to be applied and construed to make the laws of the Marshall Islands, with respect of the subject matter of
the BCA, uniform with the laws of the State of Delaware and other states with substantially similar legislative provisions, there
have been few court cases interpreting the BCA in the Marshall Islands and we cannot predict whether Marshall Islands courts would
reach the same conclusions as United States courts. Thus, you may have more difficulty in protecting your interests in the face
of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a
United States jurisdiction that has developed a more substantial body of case law in the corporate law area.



It may be difficult to serve us with
legal process or enforce judgments against us, our directors, our significant shareholders, or our management.



Our business is operated primarily from our
offices in Greece. In addition, our largest shareholder and a majority of our directors and officers are non-residents of the United
States, and all of our assets and a substantial portion of the assets of these non-residents are located outside the United States.
As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United
States if you believe that your rights have been infringed under securities laws or otherwise. You may also have difficulty enforcing,
both within and outside of the United States, judgments you may obtain in the United States courts against us or these persons
in any action, including actions based upon the civil liability provisions of United States federal or state securities laws. There
is also substantial doubt that the courts of the Marshall Islands or Greece would enter judgments in original actions brought in
those courts predicated on United States federal or state securities laws.



35







The nature of our operations may make
the outcome of any bankruptcy proceedings difficult to predict.



We redomiciled into the Marshall Islands and
our subsidiaries are incorporated under the laws of the Marshall Islands or Malta, we have limited operations in the United States
and we maintain limited assets, if any, in the United States. Consequently, in the event of any bankruptcy, insolvency, liquidation,
dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of
the United States could apply. The Marshall Islands does not have a bankruptcy statute or general statutory mechanism for insolvency
proceedings. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction
over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that
we would become a debtor in the United States, or that a U.S. bankruptcy court would accept, or be entitled to accept, jurisdiction
over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize
a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction. These factors
may delay or prevent us from entering bankruptcy in the United States and may affect the ability of our shareholders to receive
any recovery following our bankruptcy.



We, or our large shareholders, may sell
additional securities in the future.



The market price of our common shares could
decline due to sales of a large number of our securities in the market, including sales of shares by our large shareholders, or
the perception that these sales could occur. These sales could also occur if our warrant holders exercise their warrants and sell
the common shares resulting from their warrants exercise. These sales could also make it more difficult or impossible for us to
sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of shares.



We may issue additional common shares,
including Class B shares, or other equity securities without your approval.



We may issue additional common shares, including
Class B shares, or other equity securities of equal or senior rank in the future in connection with, among other things, future
vessel acquisitions, repayment of outstanding indebtedness or our equity incentive plan, without shareholder approval, in a number
of circumstances.



Our issuance of additional common shares (which
will occur each time a warrant holder exercises a warrant), including Class B shares, or other equity securities of equal or senior
rank would have the following effects:



| | Ø | our existing shareholders’ proportionate ownership interest in us will decrease;                           
| | - | -----------------------------------------------------------------------------------------------------------
| | Ø | the amount of cash available for dividends payable on our common shares may decrease;                      
| | Ø | the relative voting strength of each previously outstanding share may be diminished; and                   
| | Ø | the market price of our common shares may decline, and we could be forced to delist our shares from Nasdaq.



Because we are a foreign private issuer, we
are not bound by any Nasdaq rule that requires shareholder approval for certain issuances of our securities. We therefore can issue
securities in such amounts and at such times as we feel appropriate, all without shareholder approval. See “Item 16G. Corporate
Governance.”



Item 4.  Information on the Company



A.  History
and Development of the Company



We originally incorporated as Globus Maritime
Limited on July 26, 2006 pursuant to the Companies (Jersey) Law 1991 (as amended), and began operations in September 2006. Following
the conclusion of our initial public offering on June 1, 2007, our common shares were listed on the London Stock Exchange’s
Alternative Investment Market, or AIM, under the ticker “GLBS.L.” On July 29, 2010, we effected a one-for-four reverse
stock split, with our issued share capital resulting in 7,240,852 common shares of $0.004 each.



On November 24, 2010, we redomiciled into the
Marshall Islands pursuant to the BCA and a resale registration statement for our common shares was declared effective by the SEC.
Once the resale registration statement was declared effective by the SEC, our common shares began trading on the Nasdaq Global
Market under the ticker “GLBS.” Our common shares were suspended from trading on the AIM on November 24, 2010 and were
delisted from the AIM on November 26, 2010.



On June 30, 2011, we completed a follow-on
public offering in the United States under the Securities Act of 1933, as amended, which we refer to as the Securities Act, of
2,750,000 common shares at a price of $8.00 per share, the net proceeds of which amounted to approximately $20 million.



On April 11, 2016, our common shares began
trading on the Nasdaq Capital Market instead of the Nasdaq Global Market.



On October 20, 2016, we
effected a four-for-one reverse stock split which reduced the number of our outstanding common shares from 10,510,741 to 2,627,674
shares (adjustments were made based on fractional shares).



36







As of December 31, 2016, our issued and outstanding
capital stock consisted of 2,627,674 common shares.



On February 8, 2017, we entered
into a Share and Warrant Purchase Agreement pursuant to which we sold for $5 million an aggregate of 5 million of our common shares,
par value $0.004 per share and warrants to purchase 25 million of our common shares at a price of $1.60 per share (subject to adjustment)
to a number of investors in a private placement. These securities were issued in transactions exempt from registration under the
Securities Act. The following day, we entered into a registration rights agreement with the Purchasers providing them with certain
rights relating to registration under the Securities Act of the Shares and the common shares underlying the Warrants.



In connection with the closing
of the February 2017 private placement, we also entered into two loan amendment agreements with existing lenders.



One loan amendment agreement
was entered into by the Company with Firment Trading Limited, a related party to the Company and the lender of the Firment Credit
Facility, which then had an outstanding principal amount of $18,523,787. Firment released an amount equal to $16,885,000 (but left
an amount equal to $1,638,787 outstanding, which continued to accrue under the Firment Credit Facility as though it were principal)
of the Firment Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Firment, 16,885,000 common shares
and a warrant to purchase 6,230,580 common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the closing
of the February 2017 private placement, Globus repaid the outstanding amount on the Firment Credit Facility in its entirety.



The other loan amendment
agreement was entered into by the Company with Silaner Investments Limited, a related party to the Company and the lender of the
Silaner Credit Facility. Silaner released an amount equal to the outstanding principal of $3,115,000 (but left an amount equal
to $74,048 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal) of the Silaner
Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares and a warrant
to purchase 1,149,437 common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the closing of the February
2017 private placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety.



Each of the above mentioned
warrants are exercisable for 24 months after their respective issuance. Under the terms of the warrants, all warrant holders (other
than Firment Shipping Inc., which has no such restriction in its warrants) may not exercise their warrants to the extent such exercise
would cause such warrant holder, together with its affiliates and attribution parties, to beneficially own a number of common shares
which would exceed 4.99% (which may be increased, but not to exceed 9.99%) of our then outstanding common shares immediately following
such exercise, excluding for purposes of such determination common shares issuable upon exercise of the warrants which have not
been exercised. This provision does not limit a warrant holder from acquiring up to 4.99% of our common shares, selling all of
their common shares, and re-acquiring up to 4.99% of our common shares.



Our executive office is located at the office
of Globus Shipmanagement Corp., which we refer to as our Manager, at 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada, Athens,
Greece. Our telephone number is +30 210 960 8300. Our registered agent in the Marshall Islands is The Trust Company of the Marshall
Islands, Inc. and our registered address in the Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH96960. We maintain our website at www.globusmaritime.gr. Information that is available on or accessed through
our website does not constitute part of, and is not incorporated by reference into, this annual report on Form 20-F.



As of December 31, 2010, our fleet comprised
a total of five dry bulk vessels, consisting of one Panamax, three Supramaxes and one Kamsarmax, with a weighted average age of
approximately 4.0 years and a total carrying capacity of 319,664 dwt.



In March 2011, we purchased a 2007-built Supramax
vessel for $30.3 million. The vessel was delivered in September 2011 and was named Sun Globe. In May 2011, we purchased
a 2005-built Panamax vessel for $31.4 million. The vessel was delivered in June 2011 and was named Moon Globe.



As of December 31, 2014 and 2013 our fleet
comprised a total of seven dry bulk vessels, consisting of two Panamax, four Supramaxes and one Kamsarmax, with a weighted average
age of approximately 8.1 and 7.1 years, respectively, and a total carrying capacity of 452,886 dwt.



37







In July 2015, we sold “Tiara Globe”,
a 1998-built Panamax. As of December 31, 2015, our fleet comprised a total of six dry bulk vessels, consisting of one Panamax,
four Supramaxes and one Kamsarmax, with an average age of 7.4 years and carrying capacity of 379,958 dwt. The weighted average
age of the vessels we owned as of March 31, 2016 was 8.1 years, and their carrying capacity was 300,571 dwt.



In March 2016, as part of
a settlement of the Kelty Loan Agreement, outstanding indebtedness of $15.65 million was released in exchange for $6.86 million
of sale proceeds from the sale of the shares of Kelty Marine Ltd. (the owner of m/v Energy Globe) plus overdue interest
of $40,708.



Our fleet is currently comprised of a total
of five dry bulk vessels consisting of one Panamax and four Supramaxes.



Our capital expenditures, which principally
consist of purchasing, operating and maintaining dry bulk vessels, for the previous three fiscal years, consisted of deferred drydocking
costs of $0.5 million in 2016, deferred drydocking costs of $1.6 million in 2015, and deferred drydocking costs of $1.5 million
in 2014.



B.  Business
Overview



We are an integrated dry bulk shipping company,
providing marine transportation services on a worldwide basis. We own, operate and manage a fleet of dry bulk vessels that transport
iron ore, coal, grain, steel products, cement, alumina and other dry bulk cargoes internationally. We intend to grow our fleet
through timely and selective acquisitions of modern vessels in a manner that we believe will provide an attractive return on equity
and will be accretive to our earnings and cash flow based on anticipated market rates at the time of purchase. There is no guarantee
however, that we will be able to find suitable vessels to purchase or that such vessels will provide an attractive return on equity
or be accretive to our earnings and cash flow.



Our operations are managed by our Athens, Greece-based
wholly owned subsidiary, Globus Shipmanagement Corp., which we refer to as our Manager, which provides in-house commercial and
technical management for our vessels and provides consulting services for an affiliated ship-management company. Our Manager has
entered into a ship management agreement with each of our wholly owned vessel-owning subsidiaries to provide services that include
managing day-to-day vessel operations, such as supervising the crewing, supplying, maintaining of vessels and other services, and
has also entered into a consultancy agreement with an affiliated ship-management company, where our Manager provides consulting
services to the affiliated ship-management company.



The following table presents information concerning
the vessels we own:



|Vessel          |  | YearBuilt |  | Flag             |  | DirectOwner                |  | Shipyard        |  | Vessel Type |  | DeliveryDate   |  | CarryingCapacity(dwt)
|--------------- |  | --------- |  | ---------------- |  | -------------------------- |  | --------------- |  | ----------- |  | -------------- |  | ---------------------
|m/v River Globe |  | 2007      |  | Marshall Islands |  | Devocean Maritime Ltd.     |  | Yangzhou Dayang |  | Supramax    |  | December 2007  |  | 53,627               
|m/v Sky Globe   |  | 2009      |  | Marshall Islands |  | Domina Maritime Ltd.       |  | Taizhou Kouan   |  | Supramax    |  | May 2010       |  | 56,855               
|m/v Star Globe  |  | 2010      |  | Marshall Islands |  | Dulac Maritime S.A.        |  | Taizhou Kouan   |  | Supramax    |  | May 2010       |  | 56,867               
|m/v Moon Globe  |  | 2005      |  | Marshall Islands |  | Artful Shipholding S.A.    |  | Hudong-Zhonghua |  | Panamax     |  | June 2011      |  | 74,432               
|m/v Sun Globe   |  | 2007      |  | Malta            |  | Longevity Maritime Limited |  | Tsuneishi Cebu  |  | Supramax    |  | September 2011 |  | 58,790               
|                |  |           |  |                  |  |                            |  |                 |  | Total:      |  |                |  | 300,571              



We own each of our vessels through separate,
wholly owned subsidiaries, four of which are incorporated in the Marshall Islands, and one of which is incorporated in Malta. All
of our Supramax vessels are geared. Geared vessels can operate in ports with minimal shore-side infrastructure. Due to the ability
to switch between various dry bulk cargo types and to service a wider variety of ports, the day rates for geared vessels tend to
have a premium.



Our Manager also has a consultancy agreement
with an affiliated ship management company, where our Manager provides consulting services.



We budget 20 days per year in drydocking per
vessel. Actual length will vary based on the condition of each vessel, shipyard schedules and other factors.



38







Employment of our Vessels



Our strategy is to employ our vessels on a
mix of all types of charter contracts, including bareboat charters, time charters and spot charters. We believe this strategy provides
the cash flow stability, reduced exposure to market downturns and high utilization rates of the charter market, while at the same
time enabling us to benefit from periods of increasing spot market rates. We may, however, seek to employ a greater portion of
our fleet on the spot market or on time charters with longer durations, should we believe it to be in our best interests. In addition,
we generally seek to stagger the expiration dates of our charters to reduce exposure to volatility in the shipping cycle when our
vessels come off of charter. We also continually monitor developments in the dry bulk shipping industry and, subject to market
demand, will adjust the number of vessels on charters and the charter periods for our vessels according to market conditions.



We and our Manager have developed relationships
with a number of international charterers, vessel brokers, financial institutions, insurers and shipbuilders. We have also developed
a network of relationships with vessel brokers who help facilitate vessel charters and acquisitions.



On the date of the filing of this Annual Report
on 20-F, all of our vessels were employed on spot time charters.



Each of our vessels travels across the world
and not on any particular route. The charterers of our vessels, whether time, bareboat or on the spot market, select the locations
to which our vessels travel.



Time Charter



A time charter is a contract for the use of
a vessel for a fixed period of time at a specified daily rate. Under a time charter, the vessel owner provides crewing, insuring,
repairing and maintenance and other services related to the vessel’s operation, the cost of which is included in the daily
rate, and the customer is responsible for substantially all of the vessel voyage costs, including the cost of bunkers (fuel oil)
and canal and port charges. The owner also pays commissions typically ranging from 0% to 6.25% of the total daily charter hire
rate of each charter to unaffiliated ship brokers and to in-house brokers associated with the charterer, depending on the number
of brokers involved with arranging the charter.



Basic Hire Rate and
Term



“Basic hire rate” refers to the
basic payment from the customer for the use of the vessel. The hire rate is generally payable semi-monthly or 15 days, in advance,
in U.S. dollars as specified in the charter.



Off-hire



When the vessel is “off-hire,”
the charterer generally is not required to pay the basic hire rate, and we are responsible for all costs. Prolonged off-hire may
lead to vessel substitution or termination of the time charter. A vessel generally will be deemed off-hire if there is a loss of
time due to, among other things, operational deficiencies; drydocking for examination or painting the bottom; equipment breakdowns;
damages to the hull; or similar problems.



Ship Management and
Maintenance



We are responsible for the technical management
of the vessel and for maintaining the vessel, periodic drydocking, cleaning and painting and performing work required by regulations.
Globus Shipmanagement provides the technical, commercial and day-to-day operational management of our vessels. Technical management
includes crewing, maintenance, repair and drydockings. During the 2016 year, we paid Globus Shipmanagement $700 per vessel per
day. All fees payable to Globus Shipmanagement for vessels that we own are eliminated upon consolidation of our accounts.



After its sale to an unrelated third party,
Kelty Marine Ltd., owner of the m/v Energy Globe, paid Globus Shipmanagement $900 per day to manage its vessel under an
agreement that expired June 27, 2017. These fees were not eliminated upon consolidation of our accounts, as Kelty Marine Ltd. was
no longer owned by Globus Maritime Limited.



On June 28, 2016, our Manager entered into
a consultancy agreement with an affiliated ship-management company and receives a $1,000 per day fee for these services. The agreement
has an initial one year term. These fees will not be eliminated upon consolidation of our accounts.



39







Termination



We are generally entitled to suspend performance
under the time charter if the customer defaults in its payment obligations. Either party may terminate the charter in the event
of war in specified countries.



Commissions



During the year ended December 31, 2016, we
paid commissions ranging from 1.25% to 6.25% relevant to each time charter agreement then in effect.



Bareboat Charter



A bareboat charter is a contract pursuant to
which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, and the charterer
provides for all of the vessel’s operating expenses. The charterer undertakes to maintain the vessel in a good state of repair
and efficient operating condition and drydock the vessel during this period as per the classification society requirements.



Redelivery



Upon the expiration of a bareboat charter,
typically the charterer must redeliver the vessel in as good structure, state, condition and class as that in which the vessel
was delivered.



Ship Management and
Maintenance



Under a bareboat charter, the charterer is
responsible for all of the vessel’s operating expenses, including crewing, insuring, maintaining and repairing the vessel,
any drydocking costs, and the stores, lube oils and communication expenses. Under a bareboat charter, the charterer is also responsible
for the voyage costs, and generally assumes all risk of operation. The charterer covers the costs associated with the vessel’s
special surveys and related drydocking falling within the charter period.



Commissions



Commissions on bareboat charters typically
range from 0% to 3.75%.



Our Customers



We seek to charter our vessels to customers
who we perceive as creditworthy thereby minimizing the risk of default by our charterers. We also try to select charterers depending
on the type of product they want to carry and the geographical areas in which they tend to trade.



Our assessment of a charterer’s financial
condition and reliability is an important factor in negotiating employment for our vessels. We generally charter our vessels to
operators, trading houses (including commodities traders), shipping companies and producers and government-owned entities and generally
avoid chartering our vessels to companies we believe to be speculative or undercapitalized entities. Since our operations began
in September 2006, our customers have included COSCO Bulk Carrier Co., Ltd, Dampskibsselskabet NORDEN A/S, ED & F Man Shipping
Limited, Transgrain, Far Eastern Silo and Shipping (Panama) S.A., and Hyundai Merchant Marine Co. Ltd. In addition, during the
periods when some of our vessels were trading on the spot market, they have been chartered to charterers such as Cargill International
SA, Oldendorff Carriers GmbH & Co. KG, Western Bulk Carriers KS and others, thus expanding our customer base.



Competition



Our business fluctuates in line with the main
patterns of trade of the major dry bulk cargoes and varies according to changes in the supply and demand for these items. We operate
in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price,
vessel location, size, age and condition of the vessel, as well as on our reputation as an owner and operator. We compete with
other owners of dry bulk vessels in the Panamax, Supramax and Kamsarmax dry bulk vessels, but we also compete with owners for the
purchase and sale of vessels of all sizes. Those competitors may be better capitalized or have more liquidity than we do. In this
period of significantly depressed pricing and over capacity, better liquidity may be a major competitive advantage, and we believe
that some of our competitors may be better capitalized than we are.



40







Ownership of dry bulk vessels is highly fragmented.
It is likely that we will face substantial competition for long-term charter business from a number of experienced companies. Many
of these competitors will have larger dry bulk vessel fleets and greater financial resources than us, which may make them more
competitive. It is also likely that we will face increased numbers of competitors entering into our transportation sectors, including
in the dry bulk sector. Many of these competitors have strong reputations and extensive resources and experience. Increased competition
may cause greater price competition, especially for long-term charters. We believe that no single competitor has a dominant position
in the markets in which we compete.



The process for obtaining longer term time
charters generally involves a lengthy and intensive screening and vetting process and the submission of competitive bids. In addition
to the quality and suitability of the vessel, longer term shipping contracts may be awarded based upon a variety of other factors
relating to the vessel operator, including:



| | Ø | environmental, health and safety record;
| | - | ----------------------------------------



| | Ø | compliance with regulatory industry standards;
| | - | ----------------------------------------------



| | Ø | reputation for customer service, technical and operating expertise;
| | - | -------------------------------------------------------------------



| | Ø | shipping experience and quality of vessel operations, including cost-effectiveness;
| | - | -----------------------------------------------------------------------------------



| | Ø | quality, experience and technical capability of crews;
| | - | ------------------------------------------------------



| | Ø | the ability to finance vessels at competitive rates and overall financial stability;
| | - | ------------------------------------------------------------------------------------



| | Ø | relationships with shipyards and the ability to obtain suitable berths;
| | - | -----------------------------------------------------------------------



| | Ø | construction management experience, including the ability to procure on-time delivery of new vessels according to customer specifications;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | competitiveness of the bid in terms of overall price.
| | - | -----------------------------------------------------



As a result of these factors, we may be unable
to expand our relationships with existing customers or obtain new customers for long-term time charters on a profitable basis,
if at all. However, even if we are successful in employing our vessels under longer term charters, our vessels will not be available
for trading on the spot market during an upturn in the market cycle, when spot trading may be more profitable. If we cannot successfully
employ our vessels in profitable charters, our results of operations and operating cash flow could be materially adversely affected.



The Dry Bulk Shipping Industry



The world dry bulk fleet is generally divided
into six major categories, based on a vessel’s cargo carrying capacity. These categories consist of: Handysize, Handymax/Supramax,
Panamax, Kamsarmax, Capesize and Very Large Ore Carrier.



Ø
     Handysize. Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels
are primarily involved in carrying minor bulk cargoes. Increasingly, vessels of this type operate on regional trading routes, and
may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft
restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading.



Ø
     Handymax/Supramax. Handymax vessels have a carrying capacity of between 40,000 and 59,999 dwt.
These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily iron ore, coal, grains
and minor bulks. Within the Handymax category there is also a sub-sector known as Supramax. Supramax bulk vessels are vessels
between 50,000 to 59,999 dwt, normally offering cargo loading and unloading flexibility with on-board cranes, while at the same
time possessing the cargo carrying capability approaching conventional Panamax bulk vessels. Hence, the earnings potential of a
Supramax dry bulk vessel, when compared to a conventional Handymax vessel of 45,000 dwt, is greater.



41







Ø
     Panamax. Panamax vessels have a carrying capacity of between 60,000 and 79,999 dwt. These vessels
carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. The term “Panamax”
refers to vessels that were able to pass through the Panama Canal before the Panama Canal was expanded in June 2016 (to allow vessels
of up to 120,000 dwt). Panamax vessels are more versatile than larger vessels.



Ø
     Kamsarmax. Kamsarmax vessels typically have a carrying capacity of between 80,000 and 109,999 dwt.
These vessels tend to be shallower and have a larger beam than a standard Panamax vessel with a higher cubic capacity. They have
been designed specifically for loading high cubic cargoes from draught restricted ports. The term Kamsarmax stems from Port Kamsar
in Guinea, where large quantities of bauxite are exported from a port with only 13.5 meter draught and a 229 meter length overall
restriction, but no beam restriction.



Ø
     Capesize. Capesize vessels have carrying capacities of between 110,000 and 199,999 dwt. Only the
largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are mainly used
to transport iron ore or coal and, to a lesser extent, grains, primarily on long-haul routes.



Ø
     VLOC. Very large ore carriers are in excess of 200,000 dwt. VLOCs are built to exploit economies
of scale on long-haul iron ore routes.



The supply of dry bulk shipping capacity, measured
by the amount of suitable vessel tonnage available to carry cargo, is determined by the size of the existing worldwide dry bulk
fleet, the number of new vessels on order, the scrapping of older vessels and the number of vessels out of active service (i.e.,
laid up or otherwise not available for hire). In addition to prevailing and anticipated freight rates, factors that affect the
rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices,
costs of bunkers and other voyage expenses, costs associated with classification society surveys, normal maintenance and insurance
coverage, the efficiency and age profile of the existing fleets in the market and government and industry regulation of marine
transportation practices. The supply of dry bulk vessels is not only a result of the number of vessels in service, but also the
operating efficiency of the fleet. Dry bulk trade is influenced by the underlying demand for the dry bulk commodities which, in
turn, is influenced by the level of worldwide economic activity. Generally, growth in gross domestic product and industrial production
correlate with peaks in demand for marine dry bulk transportation services.



Dry bulk vessels are one of the most versatile
elements of the global shipping fleet in terms of employment alternatives. They seldom operate on round trip voyages with high
ballasting times. Rather, they often participate in triangular or multi-leg voyages.



Charter Rates



In the time charter market, rates vary depending
on the length of the charter period and vessel specific factors such as age, speed, size and fuel consumption. In the voyage charter
market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as delivery and redelivery regions.
In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals
generally command higher rates. Voyages loading from a port where vessels usually discharge cargo, or discharging from a port where
vessels usually load cargo, are generally quoted at lower rates. This is because such voyages generally increase vessel efficiency
by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.



Within the dry bulk shipping industry, the
freight rate indices issued by the Baltic Exchange in London are the references most likely to be monitored. These references are
based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to
the Baltic Exchange by a panel of major shipbrokers. The Baltic Exchange, an independent organization comprised of shipbrokers,
shipping companies and other shipping players, provides daily independent shipping market information and has created freight rate
indices reflecting the average freight rates (that incorporate actual business concluded as well as daily assessments provided
to the exchange by a panel of independent shipbrokers) for the major bulk vessel trading routes. These indices include the Baltic
Panamax Index, the index with the longest history and, more recently, the Baltic Capesize Index.



42







Charter (or hire) rates paid for dry bulk vessels
are generally a function of the underlying balance between vessel supply and demand. Over the past 25 years, dry bulk cargo charter
rates have passed through cyclical phases and changes in vessel supply and demand have created a pattern of rate “peaks”
and “troughs.” Generally, spot/voyage charter rates will be more volatile than time charter rates, as they reflect
short term movements in demand and market sentiment. The BDI declined from a high of 11,793 in May 2008 to a low of 663 in December
2008, which represents a decline of 94.0% within a single calendar year. During 2009, 2010 and 2011, the BDI remained volatile.
During 2009, the BDI reached a low of 772 in January 2009 and a high of 4,661 in November 2009. During 2010, the BDI reached a
high of 4,209 in May 2010 and a low of 1,700 in July 2010. During 2011, the BDI remained volatile, ranging from a low of 1,042
on February 4, 2011 to a high of 2,173 on October 14, 2011. The BDI continued to decline during the start of 2012 reaching a 26-year
low of 647 on February 3, 2012 and thereafter increased to a high of 1,165 on May 8, 2012. During 2013, the BDI remained volatile
reaching a low of 698 on January 2, 2013 and improved to 2,337 as of December 12, 2013, while volatility continued during 2014
with BDI reaching its highs of 2,113 in January 2, 2014 and its lows of 723 in July 22, 2014. The BDI reached as high as 1,222
in August 5, 2015 and a new all-time low of 471 in December 16, 2015. During 2016, the BDI reached a new all-time low of 290 on
February 10, 2016 and as high as 1,257 on November 18, 2016. The BDI ranged from 685 to 983 during January and February 2017.



Vessel Prices



New-building prices increased significantly
after 2002, due to tightness in shipyard capacity, high steel prices, rising labor cost, high levels of new ordering and stronger
freight rates. However, with the sudden and steep decline in freight rates after August 2008 and lack of new vessel ordering, new-building
vessel values entered a downward trend and have continued to gradually decline.



In broad terms, the secondhand market is affected
by both the newbuilding prices as well as the overall freight expectations and sentiment observed at any given time. The steep
increase in newbuilding prices and the strength of the charter market have also affected values, to the extent that prices rose
sharply in 2004 and 2005, before dipping in the early part of 2006, only to rise thereafter to new highs in the first half of 2008.
However, the sudden and sharp downturn in freight rates since August 2008 has also had a very negative impact on secondhand values
which have continued to gradually decline.



Seasonality



Our fleet consists of dry bulk vessels that
operate in markets that have historically exhibited seasonal variations in demand and, as a result, in charter rates. The dry bulk
sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials
in the northern hemisphere during the winter months. Such seasonality will affect the rates we obtain on the vessels in our fleet
that operate on the spot market.



Permits and Authorizations



We are required by various governmental and
quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits,
licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel
operates, the nationality of the vessel’s crew and the age of a vessel. We have been able to obtain all permits, licenses
and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise,
may be adopted which could limit our ability to do business or increase the cost of us doing business.



Inspection by Classification Societies



Every oceangoing vessel must be “classed”
by a classification society. The classification society certifies that the vessel is “in class,” signifying that the
vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules
and regulations of the vessel’s country of registry and the international conventions of which that country is a member.
In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the
classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.



The classification society also undertakes
on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject
to agreements made in each individual case and/or to the regulations of the country concerned. For maintenance of the class certification,
regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required
to be performed as follows:



| | Ø | Annual Surveys. For seagoing vessels, annual surveys are conducted for the hull and the machinery, including the electrical plant and where applicable for special equipment classed, at intervals of 12 months from the date of commencement of the class period indicated in the certificate.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys may be carried out on the occasion of the second or third annual survey.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



43







| | Ø | Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carried out for the vessel’s hull, machinery, including the electrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a shipowner has the option of arranging with the classification society for the vessel’s hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle. At an owner’s application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



All areas subject to survey as defined by the
classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are
prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.



Most insurance underwriters make it a condition
for insurance coverage that a vessel be certified as “in class” by a classification society that is a member of the
International Association of Classification Societies. All the vessels that we own and operate or that we manage are certified
as being “in class” by Nippon Kaiji Kyokai (Class NK), DNV GL, Bureau Veritas or Rina Services SPA. Typically, all
new and secondhand vessels that we purchase must be certified “in class” prior to their delivery under our standard
purchase contracts and memoranda of agreement. Under our standard purchase contracts, unless negotiated otherwise, if the vessel
is not certified on the date of closing, we would have no obligation to take delivery of the vessel. Although we may not have an
obligation to accept any vessel that is not certified on the date of closing, we may determine nonetheless to purchase the vessel,
should we determine it to be in our best interests. If we do so, we may be unable to charter such vessel after we purchase it until
it obtains such certification, which could increase our costs and affect the earnings we anticipate from the employment of the
vessel.



Vessels are drydocked during intermediate and
special surveys for repairs of their underwater parts. If “in water survey” notation is assigned, the vessel owner
has the option of carrying out an underwater inspection of the vessel in lieu of drydocking, subject to certain conditions. In
the event that an “in water survey” notation is assigned as part of a particular intermediate survey, drydocking would
be required for the following special survey thereby generally achieving a higher utilization for the relevant vessel. Drydocking
can be undertaken as part of a special survey if the drydocking occurs within 15 months prior to the special survey deadline.



The following table lists the dates by which
we expect to carry out the next drydockings and special surveys for the vessels in our fleet:



|Vessel Name     |  | Drydocking    |  | Special Survey |  | Classification Society
|--------------- |  | ------------- |  | -------------- |  | ----------------------
|m/v River Globe |  | December 2017 |  | December 2017  |  | Class NK              
|m/v Sky Globe   |  | December 2017 |  | November 2019  |  | DNV GL                
|m/v Star Globe  |  | July 2018     |  | May 2020       |  | DNV GL                
|m/v Moon Globe  |  | June 2017     |  | November 2020  |  | Class NK              
|m/v Sun Globe   |  | December 2019 |  | August 2017    |  | Bureau Veritas        



Following an incident or a scheduled survey,
if any defects are found, the classification surveyor will issue a “recommendation or condition of class” which must
be rectified by the vessel owner within the prescribed time limits.



Risk Management and Insurance



General



The operation of any cargo vessel embraces
a wide variety of risks, including the following:



| | Ø | mechanical failure or damage, for example by reason of the seizure of a main engine crankshaft;
| | - | -----------------------------------------------------------------------------------------------



| | Ø | cargo loss, for example arising from hull damage;
| | - | -------------------------------------------------



44







| | Ø | personal injury, for example arising from collision or piracy;
| | - | --------------------------------------------------------------



| | Ø | losses due to piracy, terrorist or war-like action between countries;
| | - | ---------------------------------------------------------------------



| | Ø | environmental damage, for example arising from marine disasters such as oil spills and other environmental mishaps;
| | - | -------------------------------------------------------------------------------------------------------------------



| | Ø | physical damage to the vessel, for example by reason of collision;
| | - | ------------------------------------------------------------------



| | Ø | damage to other property, for example by reason of cargo damage or oil pollution; and
| | - | -------------------------------------------------------------------------------------



| | Ø | business interruption, for example arising from strikes and political or regulatory change.
| | - | -------------------------------------------------------------------------------------------



The value of such losses or damages may vary
from modest sums, for example for a small cargo shortage damage claim, to catastrophic liabilities, for example arising out of
a marine disaster, such as a serious oil or chemical spill, which may be virtually unlimited. While we maintain the traditional
range of marine and liability insurance coverage for our fleet (hull and machinery insurance, war risks insurance and protection
and indemnity coverage) in amounts and to extents that we believe are prudent to cover normal risks in our operations, we cannot
insure against all risks, and we cannot be assured that all covered risks are adequately insured against. Furthermore, there can
be no guarantee that any specific claim will be paid by the insurer or that it will always be possible to obtain insurance coverage
at reasonable rates. Any uninsured or under-insured loss could harm our business and financial condition.



Hull and Machinery and
War Risks



The principal coverages for marine risks (covering
loss or damage to the vessels, rather than liabilities to third parties) are hull and machinery insurance and war risk insurance.
These address the risks of the actual or constructive total loss of a vessel and accidental damage to a vessel’s hull and
machinery, for example from running aground or colliding with another ship. These insurances provide coverage which is limited
to an agreed “insured value” which, as a matter of policy, is never less than the particular vessel’s fair market
value. Reimbursement of loss under such coverage is subject to policy deductibles that vary according to the vessel and the nature
of the coverage. Hull and machinery deductibles may, for example, be between $75,000 and $150,000 per incident whereas the war
risks insurance has a more modest incident deductible of, for example, $30,000.



Protection and Indemnity
Insurance



Protection and indemnity insurance is a form
of mutual indemnity insurance provided by mutual marine protection and indemnity associations, or “P&I Clubs,”
formed by vessel owners to provide protection from large financial loss to one club member by contribution towards that loss by
all members.



Each of the vessels that we operate is entered
in the Gard P&I (Bermuda) Ltd. which we refer to as the Club, for third party liability marine insurance coverage. The
Club is a mutual insurance vehicle. As a member of the Club, we are insured, subject to agreed deductibles and our terms of
entry, for our legal liabilities and expenses arising out of our interest in an entered ship, out of events occurring during the
period of entry of the ship in the Club and in connection with the operation of the ship, against specified risks. These risks
include liabilities arising from death of crew and passengers, loss or damage to cargo, collisions, property damage, oil pollution
and wreck removal.



The Club benefits from its membership in the
International Group of P&I Clubs, or the International Group, for its main reinsurance program, and maintains a separate complementary
insurance program for additional risks.



The Club’s policy year commences each
February. The mutual calls are levied by way of Estimated Total Premiums, or ETP, and the amount of the final installment
of the ETP varies in accordance with the actual total premium ultimately required by the Club for a particular policy year. Members
have a liability to pay supplementary calls which may be levied by the Club if the ETP is insufficient to cover the Club’s
outgoings in a policy year.



Cover per claim is generally limited to an
unspecified sum, being the amount available from reinsurance plus the maximum amount collectable from members of the International
Group by way of overspill calls. Certain exceptions apply, including a $1.0 billion limit on claims in respect of oil pollution,
a $3.0 billion limit on cover for passenger and crew claims and a sub-limit of $2.0 billion for passenger claims.



45







To the extent that we experience either a supplementary
or an overspill call, our policy is to expense such amounts. To the extent that the Club depends on funds paid in calls from other
members in our industry, if there were an industry-wide slow-down, other members might not be able to meet the call and we might
not receive a payout in the event we made a claim on a policy.



Uninsured Risks



Not all risks are insured and not all risks
are insurable. The principal insurable risks which nevertheless remain uninsured across our fleet are “loss of hire”
and “strikes.” We will not insure these risks because we regard the costs as disproportionate. These insurances provide,
subject to a deductible, a limited indemnity for hire that is not receivable by the shipowner for reasons set forth in the policy.
For example, loss of hire risk may be covered on a 14/90/90 basis, with a 14 days deductible, 90 days cover per incident and a
90-day overall limit per vessel per year. Should a vessel on time charter, where the vessel is paid a fixed hire day by day, suffer
a serious mechanical breakdown, the daily hire will no longer be payable by the charterer. The purpose of the loss of hire insurance
is to secure the loss of hire during such periods.



Environmental and Other Regulations



Sources of Applicable
Rules and Standards



Shipping is one of the world’s most heavily
regulated industries, and it is subject to many industry standards. Government regulation significantly affects the ownership and
operation of vessels. These regulations consist mainly of rules and standards established by international conventions, but they
also include national, state and local laws and regulations in force in jurisdictions where vessels may operate or are registered,
and which may be more stringent than international rules and standards. This is the case particularly in the United States and,
increasingly, in Europe.



A variety of governmental and private entities
subject vessels to both scheduled and unscheduled inspections. These entities include local port authorities (the U.S. Coast Guard,
harbor masters or equivalent entities), classification societies, flag state administration (country vessel of registry), and charterers,
particularly terminal operators. Certain of these entities require vessel owners to obtain permits, licenses and certificates for
the operation of their vessels. Failure to maintain necessary permits or approvals could require a vessel owner to incur substantial
costs or temporarily suspend operation of one or more of its vessels.



Heightened levels of environmental and quality
concerns among insurance underwriters, regulators and charterers continue to lead to greater inspection and safety requirements
on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have
created a demand for vessels that conform to stricter environmental standards. Vessel owners are required to maintain operating
standards for all vessels that will emphasize operational safety, quality maintenance, continuous training of officers and crews
and compliance with U.S. and international regulations. Because laws and regulations are frequently changed and may impose increasingly
stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements
on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse
environmental impact could result in additional legislation or regulation that could negatively affect our profitability.



The following is an overview of certain material
conventions, laws and regulations that affect our business and the operation of our vessels. It is not a comprehensive summary
of all the conventions, laws and regulations to which we are subject.



The International Maritime Organization, or
IMO, is a United Nations agency setting standards and creating a regulatory framework for the shipping industry and has negotiated
and adopted a number of international conventions. These fall into two main categories, consisting firstly of those concerned generally
with vessel safety and security standards, and secondly of those specifically concerned with measures to prevent pollution from
vessels.



Ship Safety Regulation



A primary international safety convention is
the Safety of Life at Sea Convention of 1974, as amended, or SOLAS, including the regulations and codes of practice that form part
of its regime. Much of SOLAS is not directly concerned with preventing pollution, but some of its safety provisions are intended
to prevent pollution as well as promote safety of life and preservation of property. These regulations have been and continue to
be regularly amended as new and higher safety standards are introduced with which we are required to comply.



46







An amendment of SOLAS introduced in 1993 the
International Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, which has been mandatory
since July 1998. The purpose of the ISM Code is to provide an international standard for the safe management and operation of vessels
and for pollution prevention. Under the ISM Code, the party with operational control of a vessel is required to develop, implement
and maintain an extensive safety management system that includes, among other things, the adoption of a safety and environmental
protection policy setting forth instructions and procedures for operating its vessels safely and protecting the environment and
describing procedures for responding to emergencies. The ISM Code requires that vessel operators obtain a Safety Management Certificate
for each vessel they operate. This certificate issued after verification that the vessel’s operator and its shipboard management
operate in accordance with the approved safety management system and evidences that the vessel complies with the requirements of
the ISM Code. No vessel can obtain a Safety Management Certificate unless its operator has been awarded a document of compliance,
issued by the respective flag state for the vessel, under the ISM Code.



Another amendment of SOLAS, made after the
terrorist attacks in the United States on September 11, 2001, introduced special measures to enhance maritime security, including
the International Ship and Port Facility Security Code, or ISPS Code, which sets out measures for the enhancement of security of
vessels and port facilities.



The vessels that we operate maintain ISM and
ISPS certifications for safety and security of operations.



Regulations to Prevent Pollution
from Ships



In the second main category of international
regulation which deals with prevention of pollution, the primary convention is the International Convention for the Prevention
of Pollution from Ships 1973 as amended by the 1978 Protocol, or MARPOL, which imposes environmental standards on the shipping
industry set out in its Annexes I-VI. These contain regulations for the prevention of pollution by oil (Annex I), by noxious liquid
substances in bulk (Annex II), by harmful substances in packaged forms within the scope of the International Maritime Dangerous
Goods Code (Annex III), by sewage (Annex IV), by garbage (Annex V) and by air emissions (Annex VI).



These regulations have been and continue to
be regularly amended and supplemented as new and higher standards of pollution prevention are introduced with which we are required
to comply.



For example, MARPOL Annex VI sets limits on
Sulphur Oxides (SOx) and Nitrogen Oxides (NOx) and particulate matter emissions from vessel exhausts and prohibits deliberate emissions
of ozone depleting substances. It also regulates the emission of volatile organic compounds (VOC) from cargo tankers and certain
gas carriers, as well as shipboard incineration of specific substances. Annex VI also includes a global cap on the sulphur content
of fuel oil with a lower cap on the sulphur content applicable inside special areas, the “Emission Control Areas” or
ECAs. Already established ECAs include the Baltic Sea, the North Sea, including the English Channel, the North American area and
the US Caribbean Sea area. The global cap on the sulphur content of fuel oil is currently 3.5% was reduced to 0.5% from January
1, 2010. From January 1, 2015 the cap on the sulphur content of fuel oil for vessels operating in ECAs has been 0.1%. Annex VI
also provides for progressive reductions in NOx emissions from marine diesel engines installed in vessels. Limiting NOx emissions
is set on a three tier reduction, the final one of which (“Tier III”) to apply to engines installed on vessels constructed
on or after January 1, 2016 and which operate in the North American ECA or the US Caribbean Sea ECA. The Tier III requirements
would also apply to engines of vessels operating in other ECAs as may be designated in the future by the IMO’s Marine Environment
Protection Committee (or MEPC) for Tier III NOx control. The Tier III requirements do not apply to engines installed on vessels
constructed prior to January 1, 2021, if they are of less than 500 gross tons, of 24 m or over in length, and have been designed
and used solely for recreational purposes. We anticipate incurring costs at each stage of implementation on all these areas. Currently
we are compliant in all our vessels.



47







Greenhouse Gas Emissions



In February 2005, the Kyoto Protocol to the
United Nations Framework Convention on Climate Change entered into force. Pursuant to the Kyoto Protocol, adopting countries are
required to implement national programs to reduce emissions of certain gases, generally referred to as greenhouse gases, which
are suspected of contributing to global warming. Currently, the greenhouse gas emissions from international shipping do not come
under the Kyoto Protocol. In December 2009, more than 27 nations, including the United States, entered into the Copenhagen Accord.
The Copenhagen Accord is non-binding, but is intended to pave the way for a comprehensive, international treaty on climate change.
On December 12, 2015 the Paris Agreement was adopted by 195 countries. The Paris Agreement deals with greenhouse gas emission reduction
measures and targets from 2020 in order to limit the global temperature increases above pre-industrial levels to well below 2 ̊
Celsius. Although shipping was ultimately not included in the Paris Agreement, it is expected that the adoption of the Paris Agreement
may lead to regulatory changes in relation to curbing greenhouse gas emissions from shipping. The Paris Agreement has been ratified
by a large number of countries and entered into force on November 4, 2016. In July 2011 the IMO adopted regulations imposing technical
and operational measures for the reduction of greenhouse gas emissions. These new regulations formed a new chapter in Annex VI
of MARPOL and became effective on January 1, 2013. The new technical and operational measures include the “Energy Efficiency
Design Index,” which is mandatory for newbuilding vessels, and the “Ship Energy Efficiency Management Plan,”
which is mandatory for all vessels. In addition, the IMO is evaluating various mandatory measures to reduce greenhouse gas emissions
from international shipping, which may include market-based instruments or a carbon tax. In October 2014 the IMO’s MEPC agreed
in principle to develop a system of data collection regarding fuel consumption of vessels. Work on the development of such a system
continued during 2015 and 2016. Currently IMO requires monitoring plans to be onboard by 2017 and monitoring to commence in 2019.
The IMO has also approved a roadmap for the development of a comprehensive IMO strategy on reduction of greenhouse gas emissions
from ships with an initial strategy to be adopted in 2018 and a revised strategy to be adopted in 2023.



The EU also has indicated that it intends to
propose an expansion of an existing EU emissions trading regime to include emissions of greenhouse gases from vessels, and individual
countries in the EU may impose additional requirements. The EU recently adopted Regulation (EU) 2015/757 on the monitoring, reporting
and verification of carbon dioxide emissions from vessels (or the MRV Regulation), which was published in the Official Journal
on May 19, 2015 and entered into force on July 1, 2015 (as amended by Regulation (EU) 2016/2071). The MRV Regulation is to apply
to all vessels over 5,000 gross tonnage (except for a few types, such as, amongst others, warships and fish catching or fish processing
vessels), irrespective of flag, in respect of carbon dioxide emissions released during intra-EU voyages and EU incoming and outgoing
voyages. The first reporting period will commence on January 1, 2018. The monitoring, reporting and verification system adopted
by the MRV Regulation may be the precursor to a market-based mechanism to be adopted in the future. The EU is currently considering
a proposal for the inclusion of shipping in the EU Emissions Trading System as from 2021 in the absence of a comparable system
operating under the IMO. In the United States, the U.S. Environmental Protection Agency, or EPA, issued an “endangerment
finding” regarding greenhouse gases under the Clean Air Act. While this finding in itself does not impose any requirements
on our industry, it authorizes the EPA to regulate directly greenhouse gas emissions through a rule-making process. Any passage
of new climate control legislation or other regulatory initiatives by the IMO, EU, the United States or other countries or states
where we operate that restrict emissions of greenhouse gases could have a significant financial and operational impact on our business
through increased compliance costs or additional operational restrictions that we cannot predict with certainty at this time.



Anti-Fouling Requirements



In 2001, the IMO adopted the International
Convention on the Control of Harmful Anti-fouling Systems on Ships, or the Anti-fouling Convention. The Anti-fouling Convention,
which entered into force in September 2008, prohibits and/or restricts the use of organotin compound coatings to prevent the attachment
of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages must obtain
an International Anti-Fouling System Certificate and undergo a survey before the vessel is put into service or before the Anti-fouling
System Certificate is issued for the first time and when the anti-fouling systems are altered or replaced.



Other International Regulations to Prevent
Pollution



In addition to MARPOL, other more specialized
international instruments have been adopted to prevent different types of pollution or environmental harm from vessels.



In February 2004, the IMO adopted an International
Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention. The BWM Convention
aims to prevent the spread of harmful aquatic organisms from one region to another, by establishing standards and procedures for
the management and control of vessels’ ballast water and sediments. The BWM Convention’s implementing regulations require
vessels to conduct ballast water management in accordance with the standards set out in the convention, which include performance
of ballast water exchange in accordance with the requirements set out in the relevant regulation and the gradual phasing in of
a ballast water performance standard which requires ballast water treatment and the installation of ballast water treatment systems
on board the vessels. The BWM Convention is now in force and vessels are required to retrofit a Ballast Water Management System
on each IOPP survey renewal after September 8, 2017. According to IMO, vessels are required to implement a Ballast Water and Sediments
Management Plan, carry a Ballast Water Record Book and an International Ballast Water Management Certificate. The BWM Convention
has not come into force yet as although more than 30 states have adopted it to date, their combined merchant fleets currently constitute
less than 35% of the gross tonnage of the world’s merchant fleet.



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The Hong Kong International Convention for
the Safe and Environmentally Sound Recycling of Ships adopted by the IMO in 2009, or the Recycling Convention, deals with issues
relating to ship recycling and aims to address the occupational health and safety, as well as environmental risks relating to ship
recycling. It contains regulations regarding the design, construction, operation, maintenance and recycling of vessels, as well
as regarding their survey and certification to verify compliance with the requirements of the Recycling Convention. The Recycling
Convention, amongst other things, prohibits and/or restricts the installation or use of hazardous materials on vessels and requires
vessels to have on board an inventory of hazardous materials specific to each vessel. It also requires ship recycling facilities
to develop a ship-recycling plan for each vessel prior to its recycling. Parties to the Recycling Convention are to ensure that
ship-recycling facilities are designed, constructed and operated in a safe and environmentally sound manner and that they are authorized
by competent authorities after verification of compliance with the requirements of the Recycling Convention. The Recycling Convention
(which is not effective yet) is to enter into force 24 months after a specified minimum number of states with a combined gross
tonnage and maximum annual recycling volume during the preceding 10 years have ratified it.



A MARPOL regulation and the International Convention
on Oil Pollution Preparedness, Response and Co-operation, 1990 also require owners and operators of vessels to adopt Shipboard
Oil Pollution Emergency Plans. Another MARPOL regulation sets out similar requirements for the adoption of shipboard marine pollution
emergency plans for noxious liquid substances with respect to vessels carrying such substances in bulk. Periodic training and drills
for response personnel and for vessels and their crews are required.



European Regulations



European regulations in the maritime sector
are in general based on international law most of which were promulgated by the IMO and then adopted by the Member States. However,
since the Erika incident in 1999, when the Erika broke in two off the coast of France while carrying heavy fuel oil,
the European Union (or EU) has become increasingly active in the field of regulation of maritime safety and protection of the environment.
It has been the driving force behind a number of amendments of MARPOL (including, for example, changes to accelerate the timetable
for the phase-out of single hull tankers, and prohibiting the carriage in such tankers of heavy grades of oil), and if dissatisfied
either with the extent of such amendments or with the timetable for their introduction it has been prepared to legislate on a unilateral
basis. In some instances where it has done so, international regulations have subsequently been amended to the same level of stringency
as that introduced in the EU, but the risk is well established that EU regulations (and other jurisdictions) may from time to time
impose burdens and costs on shipowners and operators which are additional to those involved in complying with international rules
and standards.



In some areas of regulation the EU has introduced
new laws without attempting to procure a corresponding amendment of international law. Notably, it adopted in 2005 a directive
on ship-source pollution (which has been amended in 2009), imposing criminal sanctions for discharges of oil and other noxious
substances from vessels sailing in its waters, irrespective of their flag not only where such pollution is caused by intent or
recklessness (which would be an offense under MARPOL), but also where it is caused by “serious negligence.” The directive
could therefore result in criminal liability being incurred in circumstances where it would not be incurred under international
law. Experience has shown that in the emotive atmosphere often associated with pollution incidents, retributive attitudes towards
vessel interests have found expression in negligence being alleged by prosecutors and found by courts on grounds which the international
maritime community has found hard to understand. Moreover, there is skepticism that the notion of “serious negligence”
is likely to prove any narrower in practice than ordinary negligence. Criminal liability for a pollution incident could not only
result in us incurring substantial penalties or fines but may also, in some jurisdictions, facilitate civil liability claims for
greater compensation than would otherwise have been payable.



The EU has also adopted legislation requiring
the use of low sulphur fuel. Under Council Directive 1999/32/EC as subsequently amended (most recently by Directive 2012/33/EU),
from January 1, 2015, vessels are required to burn fuel with a sulphur content not exceeding 0.1% while within EU member states’
territorial seas, exclusive economic zones and pollution control zones falling within sulphur oxide (SOx) Emission Control Areas
(or SECAs), such as the Baltic Sea and the North Sea, including the English Channel. Further sea areas may be designated as SECAs
in the future by the IMO in accordance with MARPOL Annex VI.



49







The EU has also adopted legislation (Directive
2009/16/EC on Port State Control, as subsequently amended) which requires the Member States to refuse access to their ports to
certain sub-standard vessels according to various factors, such as the vessel’s condition, flag and number of previous detentions
within certain preceding periods; creates obligations on the part of EU member port states to inspect minimum percentages of vessels
using their ports annually; and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine
environment. If deficiencies are found that are clearly hazardous to safety, health or the environment, the state is required to
detain the vessel or stop loading or unloading until the deficiencies are addressed. Member states are also required to implement
their own separate systems of proportionate penalties for breaches of these standards. Further, another EU directive (Directive
2000/59/EC) requires all ships (except for warships, naval auxiliary or other state-owned or state-operated ships on non-commercial
service), irrespective of flag, calling at, or operating within, ports of Member States to deliver all ship-generated waste and
cargo residues to port reception facilities. Under this directive, a fee is payable by the ships for the use of the port reception
facilities, including the treatment and disposal of the waste. The ships may be subject to an inspection for verification of their
compliance with the requirements of the directive and penalties may be imposed for their breach.



Commission Regulation (EU) No 802/2010, which
was adopted by the European Commission in September 2010, as part of the implementation of the Port State Control Directive and
came into force on January 1, 2011, as subsequently amended by Regulation 1205/2012 of December 14, 2012, introduced a ranking
system (published on a public website and updated daily) displaying shipping companies operating in the EU with the worst safety
records. The ranking is judged upon the results of the technical inspections carried out on the vessels owned by a particular shipping
company. Those shipping companies that have the most positive safety records are rewarded by being subjected to fewer inspections,
whilst those with the most safety shortcomings or technical failings recorded upon inspection are to be subjected to a greater
frequency of official inspections of their vessels.



By Directive 2009/15/EC of April 23, 2009 (on
common rules and standards for ship inspection and survey organizations and for the relevant activities of maritime administrations)
as amended by Directive 2014/111/EU of December 17, 2014, the European Union has established measures to be followed by the Member
States for the exercise of authority and control over classification societies, including the ability to seek to suspend or revoke
the authority of classification societies that are negligent in their duties.



The EU has also adopted Regulation (EU) No
1257/2013 which lays down rules in relation to ship recycling and management of hazardous materials on vessels. The Regulation
lays down requirements for the recycling of vessels in an environmentally sound manner at approved recycling facilities which meet
certain requirements, so as to minimize the adverse effects of recycling on human health and the environment. The Regulation also
lays down rules for the control and proper management of hazardous materials on vessels and prohibits or restricts the installation
or use of certain hazardous materials on vessels. The Regulation aims at facilitating the ratification of the Recycling Convention.
It applies to vessels flying the flag of a Member State and certain of its provisions apply to vessels flying the flag of a third
country calling at a port or anchorage of a Member State. For example, when calling at a port or anchorage of a Member State, the
vessels flying the flag of a third country will be required, amongst other things, to have on board an inventory of hazardous materials
which complies with the requirements of the Regulation and to be able to submit to the relevant authorities of that Member State
a copy of a statement of compliance issued by the relevant authorities of the country of their flag and verifying the inventory.
The Regulation is to apply not later than December 31, 2018, although certain of its provisions are to apply at different stages,
with certain of them applicable from December 31, 2020. Pursuant to this Regulation, the EU Commission has recently published the
first version of a European List of approved ship recycling facilities meeting the requirements of the regulation, as well as four
further implementing decisions dealing with certification and other administrative requirements set out in the Regulation.



Compliance Enforcement



The flag state, as defined by the United Nations
Convention on the Law of the Sea, has overall responsibility for the implementation and enforcement of international maritime regulations
for all vessels granted the right to fly its flag. The “Shipping Industry Guidelines on Flag State Performance” issued
by the International Chamber of Shipping in cooperation with other international shipping associations evaluates flag states based
on factors such as port state control record, ratification of major international maritime treaties, use of recognized organizations
conducting survey work on their behalf which comply with the IMO guidelines, age of fleet, compliance with reporting requirements
and participation at IMO meetings. The vessels that we operate are flagged in the Marshall Islands and Malta. Marshall Islands-
and Malta-flagged vessels have historically received a good assessment in the shipping industry.



Noncompliance with the ISM Code or other IMO
regulations may subject the shipowner or bareboat charterer to increased liability and, if the implementing legislation so provides,
to criminal sanctions, may lead to decreases in available insurance coverage for affected vessels or may invalidate or result in
the loss of existing insurance cover and may result in the denial of access to, or detention in, some ports. The U.S. Coast Guard
and European Union authorities have, for example, indicated that vessels not in compliance with the ISM Code will be prohibited
from trading in U.S. and European Union ports, respectively. As of the date of this annual report on Form 20-F, each of our vessels
is ISM Code certified. However, there can be no assurance that such certificate will be maintained.



50







The IMO continues to review and introduce new
regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any,
such regulations may have on our operations.



United States Environmental Regulations
and Laws Governing Civil Liability for Pollution



Environmental legislation in the United States
merits particular mention as it is in many respects more onerous than international laws, representing a high-water mark of regulation
with which shipowners and operators must comply, and of liability likely to be incurred in the event of non-compliance or an incident
causing pollution.



U.S. federal legislation, including notably
the OPA, establishes an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills,
including bunker oil spills from dry bulk vessels as well as cargo or bunker oil spills from tankers. The OPA affects all owners
and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States
waters, which includes the United States’ territorial sea and its 200 nautical mile exclusive economic zone. Under the OPA,
vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly
liable without regard to fault (unless the spill results solely from the act or omission of a third party, an act of God or an
act of war) for all containment and clean-up costs and other damages arising from discharges or substantial threats of discharges
of oil from their vessels. The OPA expressly allows the individual states of the United States to impose their own liability regimes
for the discharge of petroleum products. In addition to potential liability under the OPA as the relevant federal legislation,
vessel owners may in some instances incur liability on an even more stringent basis under state law in the particular state where
the spillage occurred.



The OPA requires the owner or operator of any
non-tank vessel of 400 gross tons or more that carries oil of any kind as a fuel for main propulsion, including bunkers, to prepare
and submit a response plan for each vessel. The vessel response plans must include detailed information on actions to be taken
by vessel personnel to prevent or mitigate any discharge or substantial threat of such a discharge of oil from the vessel.



The OPA limits the liability of responsible
parties to the greater of $1,100 per gross ton or $939,800 per non-tank vessel (subject to possible adjustment for inflation).
However, these limits of liability do not apply if an incident was proximately caused by violation of applicable United States
federal safety, construction or operating regulations or by a responsible party’s gross negligence or willful misconduct,
or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.



In addition, the Comprehensive Environmental
Response, Compensation, and Liability Act, or CERCLA, which applies to the discharge of hazardous substances (other than oil) whether
on land or at sea, contains a similar liability regime and provides for cleanup, removal and natural resource damages. Liability
under CERCLA is limited to the greater of $300 per gross ton or $0.5 million for vessels not carrying hazardous substances as cargo
or residue ($5.0 million for vessels carrying hazardous substances) unless the incident is caused by gross negligence, willful
misconduct or a violation of certain regulations, in which case liability is unlimited.



We maintain, for each of our vessels, protection
and indemnity coverage against pollution liability risks in the amount of $1.0 billion per event. This insurance coverage is subject
to exclusions, deductibles and other terms and conditions. If any liabilities or expenses fall within an exclusion from coverage,
or if damages from a catastrophic incident exceed the $1.0 billion limitation of coverage per event, our cash flow, profitability
and financial position could be adversely impacted.



We believe our insurance and protection and
indemnity coverage as described above meets the requirements of the OPA.



The OPA requires owners and operators of all
vessels over 300 gross tons, even those that do not carry petroleum or hazardous substances as cargo, to establish and maintain
with the U.S. Coast Guard evidence of financial responsibility sufficient to meet their potential liabilities under the OPA. The
U.S. Coast Guard has implemented regulations requiring evidence of financial responsibility for containerships in the amount of
$1,400 per gross ton, which includes the OPA limitation on liability of $1,100 per gross ton and the CERCLA liability limit of
$300 per gross ton for vessels not carrying hazardous substances as cargo or residue. Under the regulations, vessel owners and
operators may evidence their financial responsibility by showing proof of insurance, surety bond, self-insurance or guaranty.



Under the OPA, an owner or operator of a fleet
of vessels is required only to demonstrate evidence of financial responsibility in an amount sufficient to cover the vessel in
the fleet having the greatest limited liability under the OPA.



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The U.S. Coast Guard’s regulations concerning
certificates of financial responsibility provide, in accordance with the OPA, that claimants may bring suit directly against an
insurer or guarantor that furnishes the guaranty that supports the certificates of financial responsibility. In the event that
such insurer or guarantor is sued directly, it is prohibited from asserting any contractual defense that it may have had against
the responsible party and is limited to asserting those defenses available to the responsible party and the defense that the incident
was caused by the willful misconduct of the responsible party.



The OPA specifically permits individual states
to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states
have enacted legislation providing for unlimited liability for oil spills. In some cases, states that have enacted such legislation
have not yet issued implementing regulations defining vessels owners’ responsibilities under these laws. We intend to comply
with all applicable state regulations in the ports where our vessels call.



The United States Clean Water Act, or CWA,
prohibits the discharge of oil or hazardous substances in U.S. navigable waters and imposes strict liability in the form of penalties
for unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements
the remedies available under CERCLA.



The EPA enacted rules governing the regulation
of ballast water discharges and other discharges incidental to the normal operation of vessels within U.S. waters. Under the rules,
commercial vessels 79 feet in length or longer (other than commercial fishing vessels), or Regulated Vessels, are required to obtain
a CWA permit regulating and authorizing such normal discharges. This permit, which the EPA has designated as the Vessel General
Permit for Discharges Incidental to the Normal Operation of Vessels, or VGP, incorporates the current U.S. Coast Guard requirements
for ballast water management as well as supplemental ballast water requirements, and includes limits applicable to specific discharge
streams, such as deck runoff, bilge water and gray water.



For each discharge type, among other things,
the VGP establishes effluent limits pertaining to the constituents found in the effluent, including best management practices,
or BMPs, designed to decrease the amount of constituents entering the waste stream. Unlike land-based discharges, which are deemed
acceptable by meeting certain EPA-imposed numerical effluent limits, each of the VGP discharge limits is deemed to be met when
a Regulated Vessel carries out the BMPs pertinent to that specific discharge stream. The VGP imposes additional requirements on
certain Regulated Vessel types that emit discharges unique to those vessels. Administrative provisions, such as inspection, monitoring,
recordkeeping and reporting requirements are also included for all Regulated Vessels.



The VGP application procedure, known as the
Notice of Intent, or NOI, may be accomplished through the “eNOI” electronic filing interface. We submitted NOIs for
all our vessels to which the CWA applies. The Vessel General Permit contains limits on effluents, and specific measures with respect
to ships operating on the Great Lakes.



In addition, pursuant to Section 401 of the
CWA, which requires each state to certify federal discharge permits such as the VGP, certain states have enacted additional discharge
standards as conditions to their certification of the VGP. These local standards bring the VGP into compliance with more stringent
state requirements, such as those further restricting ballast water discharges and preventing the introduction of non-indigenous
species considered to be invasive. The VGP and related state-specific regulations and any similar restrictions enacted in the future
will increase the costs of operating in the relevant waters.



The U.S. National Invasive Species Act, or
NISA, was enacted in 1996 in response to growing reports of harmful organisms being released into U.S. ports through ballast water
taken on by vessels in foreign ports. NISA established a ballast water management program for vessels entering U.S. waters. Under
NISA, mid-ocean ballast water exchange is voluntary, except for vessels heading to the Great Lakes or Hudson Bay, or vessels engaged
in the foreign export of Alaskan North Slope crude oil. However, NISA’s reporting and record keeping requirements are mandatory
for vessels bound for any port in the United States.



In March 2012, the U.S. Coast Guard issued
a final rule establishing standards for the allowable concentration of living organisms in ballast water discharged in U.S. waters
and requiring the phase-in of Coast Guard approved ballast water management systems. The rule went into effect in June 2012, and
adopts ballast water discharge standards for vessels calling on U.S. ports and intending to discharge ballast water equivalent
to those set in IMO’s Ballast Water Management Convention. The final rule requires that ballast water discharge have no more
than 10 living organisms per milliliter for organisms between 10 and 50 micrometers in size. For organisms larger than 50 micrometers,
the discharge can have 10 living organisms per cubic meter of discharge. The U.S. Coast Guard had reviewed the practicability of
implementing a more stringent ballast water discharge standard. The rule requires installation of Coast Guard approved ballast
water management systems by new vessels constructed on or after December 1, 2013, and existing vessels as of their first drydocking
after January 1, 2016. If Coast Guard type approved technologies were not available by a vessel’s compliance date, the vessel
may request an extension to the deadline from the U.S. Coast Guard. On December 2, 2016 the U.S. Marine Safety Center announced
the approval of the first Coast Guard type approved ballast water management systems. Existing letters extending dates for vessels
to comply with the ballast water management system requirements remain valid, and the Coast Guard will consider requests for additional
extensions if evidence is shown by the owner or operator as to why compliance is not possible.



52







Security Regulations



Since the terrorist attacks of September 11,
2001, there have been a variety of initiatives intended to enhance vessel security. In November 2002, the MTSA came into effect.
To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of
certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in
December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new
chapter went into effect on July 1, 2004, and imposes various detailed security obligations on vessels and port authorities, most
of which are contained in the newly created ISPS Code. Among the various requirements are:



| | Ø | on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications;
| | - | ----------------------------------------------------------------------------------------------------------------------



| | Ø | on-board installation of ship security alert systems;
| | - | -----------------------------------------------------



| | Ø | the development of vessel security plans; and
| | - | ---------------------------------------------



| | Ø | compliance with flag state security certification requirements.
| | - | ---------------------------------------------------------------



The U.S. Coast Guard regulations, intended
to be aligned with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided
such vessels have on board a valid International Ship Security Certificate that attests to the vessel’s compliance with SOLAS
security requirements and the ISPS Code. The vessels in our fleet that we operate have on board valid International Ship Security
Certificates and, therefore, will comply with the requirements of the MTSA.



International Laws Governing
Civil Liability to Pay Compensation or Damages



Although the United States is not a party to
the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by the 1992 Protocol and further amended
in 2000, or the CLC (which has been adopted by the IMO and sets out a liability regime in relation to oil pollution damage), many
countries are parties and have ratified either the original CLC or its 1992 Protocol. Under the CLC, a vessel’s registered
owner is strictly liable for pollution damage caused in the territorial waters or, under the 1992 Protocol, in the exclusive economic
zone or equivalent area, of a contracting state by discharge of persistent oil, subject to certain defenses and subject to the
right to limit liability. The original CLC applies to vessels carrying oil as cargo and not in ballast, whereas the CLC as amended
by the 1992 Protocol applies to tanker vessels and combination carriers (i.e., vessels which sometimes carry oil in bulk and sometimes
other cargoes) but only when the latter carry oil in bulk as cargo and during any voyage following such carriage (to the extent
they have oil residues on board). The limits on liability are based on the use of the International Monetary Fund currency unit
of Special Drawing Rights, or SDR. Under the 2000 amendment to the 1992 Protocol that became effective on November 1, 2003, for
vessels between 5,000 and 140,000 gross tons (a unit of measurement for the total enclosed spaces within a vessel), liability is
limited to approximately 4.51 million SDR plus 631 SDR for each additional gross ton over 5,000. For vessels of over 140,000 gross
tons, liability is limited to 89.77 million SDR. The exchange rate between SDRs and U.S. dollars was 0.739368 per dollar on April
10, 2017. Under the original CLC, the right to limit liability is forfeited where the incident causing the damage is caused by
the owner’s actual fault or privity and under the 1992 Protocol where the relevant incident is caused by the owner’s
personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would
probably result. Vessels trading with states that are parties to these conventions must provide evidence of insurance covering
the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law govern,
and liability is imposed either on the basis of fault or in a manner similar to that of the convention. We believe that our protection
and indemnity insurance will cover the liability under the regime adopted by the IMO.



The CLC is supplemented by the International
Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971, as amended (or the Fund
Convention). The purpose of the Fund Convention was the creation of a supplementary compensation fund (the International Oil Pollution
Compensation Fund, or IOPC Fund) which provides additional compensation to victims of a pollution incident who are unable to obtain
adequate or any compensation under the CLC.



53







In 2001, the IMO adopted the International
Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, which covers liability and compensation
for pollution damage caused in the territorial waters or the exclusive economic zone or equivalent area of ratifying states by
discharges of “bunker oil.” The Bunker Convention defines “bunker oil” as “any hydrocarbon mineral
oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such
oil.” The Bunker Convention imposes strict liability (subject to certain defenses) on the shipowner (which term includes
the registered owner, bareboat charterer, manager and operator of the vessel). It also requires registered owners of vessels over
a certain size to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national
or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of
Liability for Maritime Claims of 1976, as amended by the 1996 Protocol to it, or the 1976 Convention). The Bunker Convention entered
into force in November 2008. In other jurisdictions, liability for spills or releases of oil from vessels’ bunkers continues
to be determined by the national or other domestic laws in the jurisdiction where the events or damages occur.



The IMO’s International Convention on
Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea 1996, as superseded
by the 2010 Protocol, or the HNS Convention, sets out a liability regime for loss or damage caused by hazardous or noxious substances
carried on board a vessel. These substances are listed in the convention itself or defined by reference to lists of substances
included in various IMO conventions and codes. The HNS Convention covers loss or damage by contamination to the environment, costs
of preventive measures and further damage caused by such measures, loss or damage to property outside the ship and loss of life
or personal injury caused by such substances on board or outside the ship. It imposes strict liability (subject to certain defenses)
on the registered owner of the vessel and provides for limitation of liability and compulsory insurance. The owner’s right
to limit liability is lost if it is proved that the damage resulted from the owner’s personal act or omission, committed
with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. The HNS Convention
has not entered into force yet.



Outside the United States, national laws generally
provide for the owner to bear strict liability for pollution, subject to a right to limit liability under applicable national or
international regimes for limitation of liability. The most widely applicable international regime limiting maritime pollution
liability is the 1976 Convention. However, claims for oil pollution damage within the meaning of the CLC or any Protocol or amendment
to it are expressly excepted from the limitation regime set out in the 1976 Convention. Rights to limit liability under the 1976
Convention are forfeited where it is proved that the loss resulted from the shipowner’s personal act or omissions, committed
with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. Some states have ratified
the 1996 Protocol to the 1976 Convention, which provides for liability limits substantially higher than those set forth in the
original 1976 Convention to apply in such states. Finally, some jurisdictions are not a party to either the 1976 Convention or
the 1996 Protocol, and some are parties to other earlier limitation of liability conventions and, therefore, shipowners’
rights to limit liability for maritime pollution in such jurisdictions may be different or uncertain.



The Maritime Labour
Convention



The International Labour Organization’s
Maritime Labour Convention was adopted in 2006 (“MLC 2006”). The basic aims of the MLC 2006 are to ensure comprehensive
worldwide protection of the rights of seafarers and to establish a level playing field for countries and ship owners committed
to providing decent working and living conditions for seafarers, protecting them from unfair competition on the part of substandard
ships. The Convention was ratified on August 20, 2012, and all our vessels have been certified, as required. We do not expect that
the MLC 2006 requirements will have a material effect on our operations.



C.  Organizational
Structure



Globus Maritime Limited is a holding company.
As of the date of this annual report, Globus wholly owns six operational subsidiaries, five of which are Marshall Islands corporations
and one of which is incorporated in Malta. Five of our operational subsidiaries each own one vessel and our sixth operational subsidiary,
our Manager, provides the technical and day-to-day commercial management of our fleet and also provides consultancy services to
an affiliated ship-management company. Our Manager maintains ship management agreements with each of our vessel-owning subsidiaries
as well as a consultancy agreement with an affiliated ship-management company.



54







D.  Property,
Plants and Equipment



In August 2006, our Manager entered into a
rental agreement for 350 square meters of office space for our operations within a building owned by Cyberonica S.A., a related
party to us. Rental expense was €14,578 per month until December 31, 2015. The rental agreement provided for an annual increase
in rent of 2% above the rate of inflation as set by the Bank of Greece. The contract ran for nine years and could have been terminated
by us with six

months’
notice, and terminated at the end of 2015. In 2016 we renewed the rental agreement at a monthly rate of €10,360 ($10,900)
with a lease period ending January 2, 2025. We do not presently own any real estate. As of December 31, 2016, we owed Cyberonica
approximately $313,000 of back rent.



For information about our vessels and how we
account for them, see “Item 5. Operating and Financial Review and Prospects. A. Operating Results – Results of Operations
– Critical Accounting Policies – Impairment of Long-Lived Assets.” Other than our vessels, we do not have any
material property. Our vessels are subject to priority mortgages, which secure our obligations under our various loan and credit
facilities.



For further details regarding our loan agreements
and credit facilities, please see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital
Resources — Indebtedness.”



We have no manufacturing capacity, nor do we
produce any products.



We believe that our existing facilities are
adequate to meet our needs for the foreseeable future.



Item 4A.  Unresolved Staff Comments



None.



Item 5.  Operating and Financial
Review and Prospects



The following discussion should be read
in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this annual
report on Form 20-F. We believe that the following discussion contains forward-looking statements that involve risks and uncertainties.
Actual results or plan of operations could differ materially from those anticipated by forward-looking information due to factors
discussed under “Item 3.D.  Risk Factors” and elsewhere in this annual report on Form 20-F. Please see the
section “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this annual report on Form 20-F.



A.  Operating
Results



Overview



We are an integrated dry bulk shipping company,
which began operations in September 2006, providing marine transportation services on a worldwide basis. We own, operate and manage
a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina and other dry bulk cargoes internationally,
and we manage one ship that we do not own. Following the conclusion of our initial public offering on June 1, 2007, our common
shares were listed on the AIM under the ticker “GLBS.L.” On July 29, 2010, we effected a one-for-four reverse stock
split, with our issued share capital resulting in 7,240,852 common shares of $0.004 each. On November 24, 2010, we redomiciled
into the Marshall Islands pursuant to the BCA and a resale registration statement for our common shares was declared effective
by the SEC. Once the resale registration statement was declared effective by the SEC, our common shares began trading on the Nasdaq
Global Market under the ticker “GLBS.” We delisted our common shares from the AIM on November 26, 2010.



On June 30, 2011, we completed a follow-on
public offering in the United States under the Securities Act, of 2,750,000 common shares at a price of $8.00 per share, the net
proceeds of which amounted to approximately $20 million. As of December 31, 2015, our issued and outstanding capital stock consisted
of 2,579,788 common shares.



As of December 31, 2010, our fleet consisted
of five dry bulk vessels (three Supramaxes, one Panamax and one Kamsarmax) with an aggregate carrying capacity of 319,664 dwt.
In March 2011, we purchased from an unaffiliated third party a 2007-built Supramax vessel for $30.3 million. The vessel was delivered
in September 2011 and was named Sun Globe. In May 2011, we purchased from an unaffiliated third party a 2005-built Panamax
vessel for $31.4 million. The vessel was delivered in June 2011 and was named Moon Globe. As of December 31, 2014 and 2013,
our fleet consisted of seven dry bulk vessels (four Supramaxes, two Panamax and one Kamsarmax) with an aggregate carrying capacity
of 452,886 dwt.



55







In July 2015, we sold m/v Tiara Globe,
a 1998-built Panamax. As of December 31, 2015 our fleet comprised a total of six dry bulk vessels, consisting of one Panamax, four
Supramaxes and one Kamsarmax, with an average age of 7.4 years and carrying capacity of 379,958 dwt.



In March 2016, we reached a settlement agreement
with Commerzbank relating to the Kelty Loan Agreement. Commerzbank agreed to settle the outstanding indebtedness of $15.65 million
in return for the sale of the shares of Kelty Marine Ltd. for $6.86 million plus overdue interest of $40,708, to an unrelated third
party.



On April 11, 2016 our common shares began trading
on the Nasdaq Capital Market and ceased trading on the Nasdaq Global Market, without a change in our ticker.



On October 20, 2016,
we effected a four-for-one reverse stock split which reduced the number of our outstanding common shares from 10,510,741 to 2,627,674
shares (adjustments were made based on fractional shares).

In July 2016, we redeemed
the remaining 2,567 of our Series A Preferred Shares that were issued and outstanding. In April 2012, we had issued a total of
3,347 Series A Preferred Shares, and previously redeemed 780 of these shares.



We conducted a private placement on February
8, 2017, in which we issued, for gross proceeds of $5 million, an aggregate of 5 million shares of common stock, par value $0.004
per share and warrants to purchase 25 million shares of common stock at a price of $1.60 per share, in a private placement to a
group of private investors. The Company has used a portion of, and intends to use the remaining, proceeds from the sale of common
shares and warrants for general corporate purposes and working capital including repayment of debt. In connection with the February,
2017 private placement, we terminated an aggregate of $20 million of the outstanding principal and interest of the Firment and
Silaner Credit Facilities in exchange for issuing 20 million shares and warrants exercisable for 7,380,017 common shares at a price
of $1.60 per share to nominees of the lenders. In each instance, the outstanding amounts were paid in their entirety subsequent
to the close of the February 2017 private placement, but the Facilities remain available to the Company. Both lenders are related
parties to the Company.



We intend to stabilize and then try to grow
our fleet through timely and selective acquisitions of modern vessels in a manner that we believe will provide an attractive return
on equity and will be accretive to our earnings and cash flow based on anticipated market rates at the time of purchase. There
is no guarantee however, that we will be able to find suitable vessels to purchase or that such vessels will provide an attractive
return on equity or be accretive to our earnings and cash flow.



Our strategy is to generally employ our vessels
on a mix of all types of charter contracts, including bareboat charters, time charters and spot charters although all of our vessels
are currently on the spot market. We may, from time to time, enter into charters with longer durations depending on our assessment
of market conditions.



We seek to manage our fleet in a manner that
allows us to maintain profitability across the shipping cycle and thus maximize returns for our shareholders. To accomplish this
objective we have historically deployed our vessels primarily on a mix of bareboat and time charters (with terms of between three
months and five years) and spot charters although all of our vessels are currently on the spot market. According to our assessment
of market conditions, we have historically adjusted the mix of these charters to take advantage of the relatively stable cash flow
and high utilization rates associated with time charters or to profit from attractive spot charter rates during periods of strong
charter market conditions.



The average number of vessels in our fleet
for the year ended December 31, 2016 was 5.2, for the year ended December 31, 2015 was 6.5 and for the year ended 2014
was 7.0.



Our operations are managed by our Athens, Greece-based
wholly owned subsidiary, Globus Shipmanagement Corp., our Manager, who provides in-house commercial and technical management services
to our vessels and consultancy services to an affiliated ship-management company. Our Manager enters into a ship management agreement
with each of our wholly owned vessel-owning subsidiaries to provide such services and has entered into a consultancy agreement
with an affiliated ship-management company.



56







Lack of Historical Operating Data for Vessels
Before their Acquisition



Consistent with shipping industry practice,
we were not and have not been able obtain the historical operating data for the secondhand vessels we purchase, in part because
that information is not material to our decision to acquire such vessels, nor do we believe such information would be helpful to
potential investors in our common shares in assessing our business or profitability. We purchased our vessels under a standardized
agreement commonly used in shipping practice, which, among other things, provides us with the right to inspect the vessel and the
vessel’s classification society records. The standard agreement does not provide us the right to inspect, or receive copies
of, the historical operating data of the vessel. Accordingly, such information was not available to us. Prior to the delivery of
a purchased vessel, the seller typically removes from the vessel all records, including past financial records and accounts related
to the vessel. Typically, the technical management agreement between a seller’s technical manager and the seller is automatically
terminated and the vessel’s trading certificates are revoked by its flag state following a change in ownership.



In addition, and consistent with shipping industry
practice, we treat the acquisition of vessels from unaffiliated third parties as the acquisition of an asset rather than a business.
We believe that, under the applicable provisions of Rule 11-01(d) of Regulation S-X under the Securities Act, the acquisition of
our vessels does not constitute the acquisition of a “business” for which historical or pro forma financial information
would be provided pursuant to Rules 3-05 and 11-01 of Regulation S-X.



Although vessels are generally acquired free
of charter, we may in the future acquire some vessels with charters. Where a vessel has been under a voyage charter, the vessel
is usually delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in
the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel
is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer’s
consent and the buyer entering into a separate direct agreement, called a novation agreement, with the charterer to assume the
charter. The purchase of a vessel itself does not transfer the charter because it is a separate service agreement between the vessel
owner and the charterer.



If the Company acquires a vessel subject to
a time charter, it amortizes the amount of the component that is attributable to favorable or unfavorable terms relative to market
terms and is included in the cost of that vessel, over the remaining term of the lease. The amortization is included in line “amortization
of fair value of time charter attached to vessels” in the income statement component of the consolidated statement of comprehensive
income.



If we purchase a vessel and assume or renegotiate
a related time charter, we must take the following steps before the vessel will be ready to commence operations:



| | Ø | obtain the charterer’s consent to us as the new owner;
| | - | ------------------------------------------------------



| | Ø | obtain the charterer’s consent to a new technical manager;
| | - | ----------------------------------------------------------



| | Ø | in some cases, obtain the charterer’s consent to a new flag for the vessel;
| | - | ---------------------------------------------------------------------------



| | Ø | arrange for a new crew for the vessel, and where the vessel is on charter, in some cases, the crew must be approved by the charterer;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | Ø | replace all hired equipment on board, such as gas cylinders and communication equipment;
| | - | ----------------------------------------------------------------------------------------



| | Ø | negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
| | - | --------------------------------------------------------------------------------------------------



| | Ø | register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | implement a new planned maintenance program for the vessel; and
| | - | ---------------------------------------------------------------



| | Ø | ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



The following discussion is intended to help
you understand how acquisitions of vessels affect our business and results of operations.



57







Our business is comprised of the following
main elements:



| | Ø | employment and operation of our dry bulk vessels and management of a vessel owned by a third party; and
| | - | -------------------------------------------------------------------------------------------------------



| | Ø | management of the financial, general and administrative elements involved in the conduct of our business and ownership of our dry bulk vessels.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



The employment and operation of our vessels
and the vessel we manage require the following main components:



| | Ø | vessel maintenance and repair;
| | - | ------------------------------



| | Ø | crew selection and training;
| | - | ----------------------------



| | Ø | vessel spares and stores supply;
| | - | --------------------------------



| | Ø | contingency response planning;
| | - | ------------------------------



| | Ø | onboard safety procedures auditing;
| | - | -----------------------------------



| | Ø | accounting;
| | - | -----------



| | Ø | vessel insurance arrangement;
| | - | -----------------------------



| | Ø | vessel chartering;
| | - | ------------------



| | Ø | vessel security training and security response plans (ISPS);
| | - | ------------------------------------------------------------



| | Ø | obtaining ISM certification and audit for each vessel within the six months of taking over a vessel;
| | - | ----------------------------------------------------------------------------------------------------



| | Ø | vessel hire management;
| | - | -----------------------



| | Ø | vessel surveying; and
| | - | ---------------------



| | Ø | vessel performance monitoring.
| | - | ------------------------------



The management of financial, general and administrative
elements involved in the conduct of our business and ownership of our vessels requires the following main components:



| | Ø | management of our financial resources, including banking relationships, i.e., administration of bank loans and bank accounts;
| | - | -----------------------------------------------------------------------------------------------------------------------------



| | Ø | management of our accounting system and records and financial reporting;
| | - | ------------------------------------------------------------------------



| | Ø | administration of the legal and regulatory requirements affecting our business and assets; and
| | - | ----------------------------------------------------------------------------------------------



| | Ø | management of the relationships with our service providers and customers.
| | - | -------------------------------------------------------------------------



The principal factors that affect our profitability,
cash flows and shareholders’ return on investment include:



| | Ø | rates and periods of hire;
| | - | --------------------------



| | Ø | levels of vessel operating expenses, including repairs and drydocking;
| | - | ----------------------------------------------------------------------



| | Ø | purchase and sale of vessels;
| | - | -----------------------------



| | Ø | management fees for any third party ships that we manage;
| | - | ---------------------------------------------------------



| | Ø | depreciation expenses;
| | - | ----------------------



58







| | Ø | financing costs; and
| | - | --------------------



| | Ø | fluctuations in foreign exchange rates.
| | - | ---------------------------------------



Revenue



Overview



We generate revenues by charging our customers
for the use of our vessels to transport their dry bulk commodities. We also generated revenues in 2016 by managing one vessel that
we didn’t own as well as by providing consultancy services to an affiliated ship-management company. Under a time charter,
the charterer pays us a fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and
port and canal charges. We remain responsible for paying the chartered vessel’s operating expenses, including the cost of
crewing, insuring, repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes and other miscellaneous
expenses. Under a bareboat charter, the charterer pays us a fixed daily charter hire rate and bears all voyage expenses, as well
as the vessel’s operating expenses.



Spot charters can be spot voyage charters or
spot time charters. Spot voyage charters involve the carriage of a specific amount and type of cargo on a load-port to discharge-port
basis, subject to various cargo handling terms, and the vessel owner is paid on a per-ton basis. Under a spot voyage charter, the
vessel owner is responsible for the payment of all expenses including capital costs, voyage and expenses, such as port, canal and
bunker costs. A spot time charter is a contract to charter a vessel for an agreed period of time at a set daily rate. Under spot
time charters, the charterer pays the voyage expenses.



Voyage revenues and management & consulting
fee income



Our Voyage revenues are driven primarily by
the number of vessels in our fleet, the number of days during which our vessels operate and the amount of daily hire rates that
our vessels earn under charters or on the spot market, which, in turn, are affected by a number of factors, including:



| | Ø | the duration of our charters;
| | - | -----------------------------



| | Ø | the number of days our vessels are hired to operate on the spot market;
| | - | -----------------------------------------------------------------------



| | Ø | our decisions relating to vessel acquisitions and disposals;
| | - | ------------------------------------------------------------



| | Ø | the amount of time that we spend positioning our vessels for employment;
| | - | ------------------------------------------------------------------------



| | Ø | the amount of time that our vessels spend in drydocking undergoing repairs;
| | - | ---------------------------------------------------------------------------



| | Ø | maintenance and upgrade work;
| | - | -----------------------------



| | Ø | the age, condition and specifications of our vessels;
| | - | -----------------------------------------------------



| | Ø | levels of supply and demand in the dry bulk shipping industry; and
| | - | ------------------------------------------------------------------



| | Ø | other factors affecting spot market charter rates for dry bulk vessels.
| | - | -----------------------------------------------------------------------



Our Voyage revenues in 2016, 2015 and 2014
decreased when compared to their respective prior year, mainly due to lower daily time charter and spot rates earned on average
from our vessels on a year over year basis. From March to June 2016, we managed a vessel that we did not own.



We did not manage any vessels that we did not
own in 2015 or 2014. In 2016, we also provided consultancy services to an affiliated ship-management company, something we did
not do in 2015 or 2014.



Employment of our Vessels



59







As of the date of this annual report, we
employed our vessels as follows:



| | Ø | m/v Star Globe – on a time charter that began in April 2017 and is expected to expire
in October 2017, at the gross rate of $11,000 per day.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | m/v River Globe – on a time charter that began in March 2017 and is expected to expire
in June 2017, at the gross rate of $10,250 per day.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | m/v Sky Globe – on a time charter that began in April 2017 and is expected to
                                                                                                                  expire in May 2017, at the gross rate of $8,800 per day.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | m/v Moon Globe – on a time charter that began in November 2016 and is expected to
expire in May 2017, at the gross rate of $6,150 per day.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | m/v Sun Globe – on a time charter that began in January 2017 and is expected to expire
in June 2016, at the gross rate of $6,600 per day.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



Our charter agreements subject us to counterparty
risk. In depressed market conditions, charterers may seek to renegotiate the terms of their existing charter parties or avoid their
obligations under those contracts. Should counterparties to one or more of our charters fail to honor their obligations under their
agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition,
results of operations, cash flows and ability to pay dividends.



Voyage Expenses



We charter our vessels primarily through time
charters under which the charterer is responsible for most voyage expenses, such as the cost of bunkers (fuel oil), port expenses,
agents’ fees, canal dues, extra war risks insurance and any other expenses related to the cargo.



Whenever we employ our vessels on a voyage
basis (such as trips for the purpose of geographically repositioning a vessel or trip(s) after the end of one time charter and
up to the beginning of the next time charter), we incur voyage expenses that include port expenses and canal charges and bunker
(fuel oil) expenses.



If we charter our vessels on bareboat charters,
the charterer will pay for most of the voyage expenses.



As is common in the shipping industry, we have
historically paid commissions ranging from 0% to 6.25% of the total daily charter hire rate of each charter to unaffiliated ship
brokers and in-house brokers associated with the charterers, depending on the number of brokers involved with arranging the charter.



For the year ended December 31, 2016 commissions
amounted to $0.5 million. For the year ended December 31, 2015 commissions amounted to $0.7 million and for the year ended December
31, 2014 commissions amounted to $1.3 million.



We believe that the amounts and the structures
of our commissions are consistent with industry practices.



These commissions are directly related to our
revenues. We therefore expect that the amount of total commissions will increase if the size of our fleet grows as a result of
additional vessel acquisitions and employment of those vessels.



Vessel Operating Expenses



Vessel operating expenses include costs for
crewing, insurance, repairs and maintenance, lubricants, spare parts and consumable stores, statutory and classification tonnage
taxes and other miscellaneous expenses. We calculate daily vessel operating expenses by dividing vessel operating expenses by ownership
days for the relevant time period excluding bareboat charter days.



Our vessel operating expenses have historically
fluctuated as a result of changes in the size of our fleet. In addition, a portion of our vessel operating expenses is in currencies
other than the U.S. dollar, such as costs related to repairs, spare parts and consumables. These expenses may increase or decrease
as a result of fluctuation of the U.S. dollar against these currencies.



We expect that crewing costs will increase
in the future due to the shortage in the supply of qualified sea-going personnel. In addition, we expect that maintenance costs
will increase as our vessels age. Other factors that may affect the shipping industry in general, such as the cost of insurance,
may also cause our expenses to increase. To the extent that we purchase additional vessels, we expect our vessel operating expenses
to increase accordingly.



60







Depreciation



The cost of each of the Company’s vessels
is depreciated on a straight-line basis over each vessel’s remaining useful economic life, after considering the estimated
residual value of each vessel, beginning when the vessel is ready for its intended use. Management estimates that the useful life
of new vessels is 25 years, which is consistent with industry practice. The residual value of a vessel is the product of its lightweight
tonnage and estimated scrap value per lightweight ton. The residual values and useful lives are reviewed at each reporting date
and adjusted prospectively, if appropriate. During the fourth quarter of 2015 we reduced the scrap rate from $335/ton to $240/ton
due to the reduced scrap rates worldwide. This resulted to an extra depreciation expense of $91,000 included in the consolidated
statement of comprehensive loss/income for 2015. During the second quarter of 2016, we reduced the scrap rate from $240/ton to
$200/ton due to the reduced scrap rates worldwide. This resulted to an extra depreciation expense of $95,600 included in the consolidated
statement of comprehensive loss/income for 2016.



We do not expect these assumptions to change
significantly in the near future. We expect that these charges will increase if we acquire additional vessels.



Depreciation of Drydocking Costs



Vessels are required to be drydocked for major
repairs and maintenance that cannot be performed while the vessels are operating. Drydockings occur approximately every 2.5 years.
The costs associated with the drydockings are capitalized and depreciated on a straight-line basis over the period between drydockings,
to a maximum of 2.5 years. At the date of acquisition of a vessel, we estimate the component of the cost that corresponds to the
economic benefit to be derived until the first scheduled drydocking of the vessel under our ownership and this component is depreciated
on a straight-line basis over the remaining period through the estimated drydocking date. We expect that drydocking costs will
increase as our vessels age and if we acquire additional vessels.



Amortization of Fair Value of Time Charter
Attached to Vessels



If the Company acquires a vessel subject to
a time charter, it amortizes the amount of the component that is attributable to favorable or unfavorable terms relative to market
terms and is included in the cost of that vessel, over the remaining term of the lease. The amortization is included in line “amortization
of fair value of time charter attached to vessels” in the income statement component of the consolidated statement of comprehensive
income.



Administrative Expenses



Our administrative expenses include payroll
expenses, traveling, promotional and other expenses associated with us being a public company, which include the preparation of
disclosure documents, legal and accounting costs, director and officer liability insurance costs and costs related to compliance.
We expect that our administrative expenses will increase as we enlarge our fleet.



Administrative Expenses Payable to Related
Parties



Our administrative expenses payable to related
parties include cash remuneration of our executive officers and directors and rental of our office space.



Share Based Payments



We operate an equity-settled, share based compensation
plan. The value of the service received in exchange of the grant of shares is recognized as an expense. The total amount to be
expensed over the vesting period, if any, is determined by reference to the fair value of the share awards at the grant date. The
relevant expense is recognized in the income statement component of the consolidated statement of comprehensive income, with a
corresponding impact in equity.



61







Impairment Loss



We assess at each reporting date whether there
is an indication that a vessel that we own may be impaired. The vessel’s recoverable amount is estimated when events or changes
in circumstances indicate the carrying value may not be recoverable. If such indication exists and where the carrying value exceeds
the estimated recoverable amounts, the vessel is written down to its recoverable amount. The recoverable amount is the greater
of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to
their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific
to the vessel. Impairment losses are recognized in the consolidated statement of comprehensive income. A previously recognized
impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statement of comprehensive income.
After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.



Gain/ (Loss) on Sale of Vessels



Gain or loss on the sale of vessels is the
residual value remaining after deducting from the vessels’ sale proceeds, the carrying value of the vessels at the respective
date of delivery to their new owners and the total expenses associated with the sale.



Other (Expenses)/Income, Net



We include other operating expenses or income
that is not classified otherwise. It mainly consists of provisions for insurance claims deductibles and refunds from insurance
claims.



Interest Income from Bank Balances &
Bank Deposits



We earn interest on the funds we have deposited
with banks as well as from short-term certificates of deposit.



Interest Expense and Finance Costs



We incur interest expense and financing costs
in connection with the indebtedness under our credit arrangements, including our Credit Facility, the Kelty Loan Agreement (prior
to its termination), the DVB Loan Agreement, the HSH Loan Agreement, the Firment Credit Facility and the Silaner Credit Facility
that we entered into in January 2016. We also incurred financing costs in connection with establishing those arrangements, which
is included in our finance costs and amortization and write-off of deferred finance charges. As of December 31, 2016, 2015 and
2014, we had $65.8 million, $78.6 million and $84.6 million of indebtedness outstanding under our then existing credit arrangements,
respectively. We incurred interest expense and financing costs relating to our outstanding debt as well as our available but undrawn
Credit Facility, if any. We will incur additional interest expense in the future on our outstanding borrowings and under future
borrowings to finance future acquisitions. Please see “Item 5.B. Liquidity and Capital Resources—Indebtedness”
for further information.



Gain/ (Loss) on Sale of Subsidiary



Gain or loss on disposal of subsidiary is
the difference between (a) the carrying amount of the net assets and (b) the proceeds of sale. In 2016 we reached a settlement
agreement with Commerzbank subsequent to which we disposed Kelty Marine Ltd., the owner of m/v Energy Globe. The result from the
sale of Kelty Marine Ltd. was a gain of $2,257,000 (including the partial write–off of the outstanding balance of the Commerzbank
loan), which is classified under “Gain from sale of subsidiary” in the consolidated statement of comprehensive loss/income.



Gain/ (Loss) on Derivative Financial Instruments



We may enter into derivative financial instruments,
which mainly consist of interest rate SWAP agreements. Derivative financial instruments are initially recognized at fair value
on the date a derivative contract is entered into and are subsequently remeasured at fair value. Changes in the fair value of these
derivative instruments are recognized immediately in the income statement component of the consolidated statement of comprehensive
income.



62







Foreign Exchange Gains/ (Losses), Net



We generate substantially all of our revenues
from the trading of our vessels in U.S. dollars but incur a portion of our expenses in currencies other than the U.S. dollar. We
convert U.S. dollars into foreign currencies to pay for our non-U.S. dollar expenses, which we then hold on deposit until the date
of each transaction. Fluctuations in foreign exchange rates create foreign exchange gains or losses when we mark-to-market these
non-U.S. dollar deposits. Because a portion of our expenses is payable in currencies other than the U.S. dollar, our expenses may
from time to time increase relative to our revenues as a result of fluctuations in exchange rates, which could affect the amount
of net income that we report in future periods.



Factors Affecting Our Results of Operations



We believe that the important measures for
analyzing trends in our results of operations consist of the following:



| | Ø | Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Available days. We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Operating days. Operating days are the number of available days in a period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels generate revenues.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades and special surveys.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Average number of vessels. We measure average number of vessels by the sum of the number of days each vessel was part of our fleet during a relevant period divided by the number of calendar days in such period.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | TCE rates. We define TCE rates as our revenue less net revenue from our bareboat charters less voyage expenses during a period divided by the number of our available days during the period excluding bareboat charter days, which is consistent with industry standards. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table reflects our ownership
days, available days, operating days, average number of vessels and fleet utilization for the periods indicated.



|                                         |  | Year Ended December 31, |      
|---------------------------------------- |  | ----------------------- | -----
|                                         |  | 2016                    |      
|Ownership days                           |  |                         | 1,908
|Available days                           |  |                         | 1,885
|Operating days                           |  |                         | 1,830
|Bareboat charter days                    |  |                         | -    
|Fleet utilization                        |  |                         | 97.1 
|Average number of vessels                |  |                         | 5.2  
|Daily time charter equivalent (TCE) rate |  | $                       | 3,962



We utilize TCE because we believe it is a meaningful
measure to compare period-to-period changes in our performance despite changes in the mix of charter types (i.e., voyage charters,
spot charters and time charters) under which our vessels may be employed between the periods. Our management also utilizes TCE
to assist them in making decisions regarding employment of our vessels. We believe that our method of calculating TCE is consistent
with industry standards and is determined by dividing revenue after deducting voyage expenses, and net revenue from our bareboat
charters, by available days for the relevant period excluding bareboat charter days. Voyage expenses primarily consist of brokerage
commissions and port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charter
under a time charter contract.



63







The following table reflects the Voyage Revenues
to Daily Time Charter Equivalent (“TCE”) Reconciliation for the periods presented.



|                                                   |  | Year Ended December 31,                                                  |      
|-------------------------------------------------- |  | ------------------------------------------------------------------------ | -----
|                                                   |  | (Expressed in Thousands of U.S. Dollars, except number of days and daily |      
|                                                   |  | TCE rates)                                                               |      
|                                                   |  | 2016                                                                     |      
|                                                   |  |                                                                          |      
|Voyage revenues                                    |  |                                                                          | 8,740
|Less: Voyage expenses                              |  |                                                                          | 1,271
|Less: bareboat charter net revenue                 |  |                                                                          | -    
|Net revenue excluding bareboat charter net revenue |  |                                                                          | 7,469
|Available days net of bareboat charter days        |  |                                                                          | 1,885
|Daily TCE rate                                     |  |                                                                          | 3,962



Results of Operations



The following is a discussion of our operating
results for the year ended December 31, 2016 compared to the year ended December 31, 2015 and for the year ended December 31, 2015
compared to the year ended December 31, 2014. Variances are calculated on the numbers presented in the discussion over operating
results.



Year ended December
31, 2016 compared to the year ended December 31, 2015



As of December 31, 2016, our fleet consisted
of five dry bulk vessels (four Supramaxes and one Panamax) with an aggregate carrying capacity of 300,571 dwt, while as of December
31, 2015 our fleet consisted of six dry bulk vessels (four Supramaxes, one Panamax and one Kamsarmax) with an aggregate carrying
capacity of 379,958 dwt. During the years ended December 31, 2016 and 2015 we had an average of 5.2 and 6.5 dry bulk vessels in
our fleet, respectively.



During the year ended December 31, 2016, we
had an operating loss of $7.2 million including a net gain of $2.3 million from the sale of our subsidiary Kelty Marine Ltd, owner
of vesselm/v Energy Globe, while during the year ended December 31, 2015, we had an operating loss of $29.7 million including
an impairment loss from the sale of the vessel m/v Tiara Globe of $7.7 million and impairment loss of vessel m/v Energy
Globe of $12.4 million.



Voyage revenues. Voyage revenues decreased
by $4 million, or 31%, to $8.7 million in 2016, compared to $12.7 million in 2015. The decrease is primarily attributable to a
decrease in average TCE rates due to unfavorable shipping rates. In 2016, we had total operating days of 1,830 and fleet utilization
of 97.1%, compared to 2,252 operating days and a fleet utilization of 96.4% in 2015. We also had 1,908 ownership days in 2016 compared
to 2,380 in 2015 due to the sale of m/v Tiara Globe in July 2015 and the sale of vessel-owning subsidiary Kelty Marine Ltd.
which owned m/v Energy Globe in March 2016.



Management & consulting fee income.During 2016 we earned income from management and consulting fees totaling $278,000. After the sale of Kelty Marine Ltd. to
its new owners, our Manager continued to act as Kelty Marine Ltd.’s ship manager at a rate of $900 per day until June 2016
when it ceased being its manager. In June 2016, Globus Shipmangement Corp., the Company’s ship management subsidiary, entered
into a consultancy agreement with Eolos Shipmanagement S.A., a related party, for the purpose of providing consultancy services
to Eolos Shipmanagement S.A. For these services the Company receives a daily fee of $1,000. In 2015 we did not have any such income
from management and consulting fees.



Voyage expenses. Voyage expenses decreased
by $1.1 million, or 46%, to $1.3 million in 2016, compared to $2.4 million in 2015. The decrease is attributed to the decrease
in bunkers expenses incurred during periods that our vessels were seeking employment by $0.9 million, or 60%, to $0.6 million in
2016, compared to $1.5 million in 2015.



64







Vessel operating
expenses. Vessel operating expenses decreased by $1.6 million, or 16%, to $8.7 million in 2016, compared to $10.3 million in
2015. The breakdown of our operating expenses for the year 2016 was as follows:



|Crew expenses      | 56%
|------------------ | ---
|Repairs and spares | 20%
|Insurance          | 9% 
|Stores             | 7% 
|Lubricants         | 5% 
|Other              | 3% 



The decrease is mainly attributed to the decrease of the fleet from
6.5 vessels in 2015 to 5.2 in 2016.



Daily vessel operating expenses were $4,553
in 2016 compared to $4,377 in 2015, representing an increase of 4%.



Depreciation. Depreciation decreased
by $1.1 million, or 17%, to $5 million in 2016, compared to $6.1 million in 2015 due to the reduce of the average number of vessels,
as m/v Tiara Globe was sold in July 2015 and the vessel-owning company of m/v Energy Globe was also sold in March
2016. There was a change of the scrap rate from $335/ton to $240/ton during the fourth quarter of 2015 as well as from $240/ton
to $200/ton during the second quarter of 2016 due to the reduced scrap rates worldwide. This resulted to an extra depreciation
expense of $96,000 included in the consolidated statement of comprehensive loss/income for 2016.



Amortization of fair value of time charter
attached to vessels. Amortization of fair value of time charter attached to vessels during the years ended December 31, 2016
and 2015 was nil and $41,000, respectively. Amortization refers to the fair value of above market time charters attached to the
vessel m/v Sun Globe acquired during the second half of 2011, which is amortized on a straight line basis over the remaining
period of the time charters. The time charter attached to the m/v Sun Globe expired in January 2015.



Administrative expenses payable to related
parties. Administrative expenses payable to related parties decreased by $114,000, or 25%, to $351,000 in 2016 compared to
$465,000 in 2015. This was attributed mainly to the decrease of our rent charges.



Administrative expenses. Administrative
expenses increased by $0.3 million, or 17% to $2.1 million in 2016 from $1.8 million in 2015 mainly due to the redemption in 2016
of the 2,567 Series A Preferred Shares held by our former CEO.



Share-based payments. Share-based payments
decreased for 2016 to $50,000 from $60,000 that was in 2015.



Gain from sale of subsidiary. In March
2016, the Company entered into an agreement with Commerzbank to sell the shares of Kelty Marine Ltd., to an unaffiliated third
party and apply the total net proceeds from the sale towards the respective loan facility. Based on certain financial conditions
agreed beforehand with Commerzbank this resulted in the remaining principal amount of the loan to be written off. The financial
effect from the sale of Kelty Marine Ltd. resulted to a net gain of $2.3 million. Globus Shipmanagement Corp., the Company’s
ship management subsidiary continued to act as Kelty Marine Ltd.’s ship manager at a rate of $900 per day until June, 2016
when it ceased being its manager.



Impairment loss. We did not recognize
any impairment loss in 2016. During the year ended December 31, 2015, we recognized an impairment loss of $20.1 million; $7.7 million
was attributed to the sale of m/v Tiara Globe and $12.4 million was recorded for m/v Energy Globe,as we concluded
that the recoverable amount of the vessel was lower than its carrying amount.



Interest expense and finance costs.
Interest expense and finance costs decreased by $0.1 million, or 4%, to $2.7 million in 2016, compared to $2.8 million in 2015.
Our weighted average interest rate for 2016 was 3.5% compared to 3.1% during 2015. Total borrowings outstanding as of December
31, 2016 amounted to $65.8 million compared to $78.6 million as of December 31, 2015. All of our credit and loan facilities are
denominated in U.S. dollars.



Year ended December
31, 2015 compared to the year ended December 31, 2014



As of December 31, 2015, our fleet consisted
of six dry bulk vessels (four Supramaxes, one Panamax and one Kamsarmax) with an aggregate carrying capacity of 379,958 dwt, while
as of December 31, 2014 our fleet consisted of seven dry bulk vessels (four Supramaxes, two Panamax and one Kamsarmax) with an
aggregate carrying capacity of 452,886 dwt. During the years ended December 31, 2015 and 2014 we had an average of 6.5 and 7.0
dry bulk vessels in our fleet, respectively.



65







During the year ended December 31, 2015, we
achieved an operating loss of $29.7 million including an impairment loss from the sale of the m/v Tiara Globe of $7.7 million
and impairment loss of the m/v Energy Globe of $12.4 million, while during the year ended December 31, 2014, we achieved
an operating profit of $5.2 million including a non-cash impairment gain from impairment reversal of $2.2 million.



Revenue. Revenue decreased by $13.7
million, or 52%, to $12.7 million in 2015, compared to $26.4 million in 2014 due to the unfavorable average shipping rates achieved
by our vessels during 2015 compared to 2014. Net revenues (Revenues minus Voyage expenses) decreased by $11.8 million, or 53%,
to $10.3 million in 2015, from $22.1 million in 2014. The decrease is primarily attributable to a decrease in average TCE rates
due to unfavorable shipping rates. In 2015, we had total operating days of 2,252 and fleet utilization of 96.4%, compared to 2,500
operating days and a fleet utilization of 99.5% in 2014. We also had 2,380 ownership days in 2015 compared to 2,555 in 2014 due
to the sale of m/v Tiara Globe in July 2015.



Voyage expenses. Voyage expenses decreased
by $1.9 million, or 44%, to $2.4 million in 2015, compared to $4.3 million in 2014. The decrease is attributed to the decrease
in bunkers expenses incurred during periods that our vessels were seeking employment by $1.2 million, or 44%, to $1.5 million in
2015, compared to $2.7 million in 2014.



Vessel operating
expenses. Vessel operating expenses increased by $0.6 million, or 6%, to $10.3 million in 2015, compared to $9.7 million in
2014. The breakdown of our operating expenses for the year 2015 was as follows:



|Crew expenses      | 57%
|------------------ | ---
|Repairs and spares | 16%
|Insurance          | 9% 
|Stores             | 9% 
|Lubricants         | 5% 
|Other              | 4% 



Daily vessel operating expenses were $4,377
in 2015 compared to $4,432 in 2014, representing a decrease of 1% due to our continued efforts towards cost efficiency.



Depreciation. Depreciation increased
by $0.5 million, or 8%, to $6.1 million in 2015, compared to $5.6 million in 2014 although the average number of vessels reduced
due to the sale of m/v Tiara Globe in July 2015. This is attributed to the change of the scrap rate from $335/ton to $240/ton
during the fourth quarter of 2015 due to the reduced scrap rates worldwide.



Amortization of fair value of time charter
attached to vessels. Amortization of fair value of time charter attached to vessels during the years ended December 31, 2015
and 2014 were $41,000 and $746,000, respectively. Amortization refers to the fair value of above market time charters attached
to the vessels m/v Moon Globe and m/v Sun Globe acquired during the second half of 2011, which is amortized on a
straight line basis over the remaining period of the time charters. The time charter attached to m/v Moon Globe expired
in June 2013. The time charter attached to the m/v Sun Globe expired in January 2015.



Administrative expenses payable to related
parties. Administrative expenses payable to related parties decreased by $57,000, or 11%, to $465,000 in 2015 compared to $522,000
in 2014. Administrative expenses decreased due to changes in the Euro/U.S. dollar exchange rate relating to payments for our rent,
directors and officers.



Administrative expenses. Administrative
expenses decreased by $0.1 million, or 5% to $1.8 million in 2015 from $1.9 million in 2014 mainly due to the efforts of the Company
to reduce its expenditures in this area.



Share-based payments. Share-based payments
remained the same during both 2015 and 2014, which was $60,000.



(Impairment loss)/Reversal of impairment.
During the year ended December 31, 2015, we recognized an impairment loss of $20.1 million; $7.7 million was attributed to the
sale of m/v Tiara Globe and $12.4 million was recorded for m/v Energy Globe,as we concluded that the recoverable
amount of the vessel was lower than its carrying amount. During the year ended December 31, 2014, we recognized an impairment reversal
of $2.2 million with reference to the vessel m/v Tiara Globe. As of December 31, 2014, the Company decided that the vessel
no longer met the criteria to be classified as held for sale and was subsequently measured at its recoverable amount at that date
of $13.6 million resulting in an impairment reversal of $2.2 million.



66







Interest expense and finance costs.
Interest expense increased by $0.7 million, or 33.3%, to $2.8 million in 2015, compared to $2.1 million in 2014. Our weighted average
interest rate for 2015 was 3.1% compared to 2.2% during 2014. Total borrowings outstanding as of December 31, 2015 amounted to
$78.6 million compared to $84.6 million as of December 31, 2014. The increase in interest expense is attributed to the increase
of the weighted average interest rate for the year ended December 31, 2015, which was 3.1%, compared to the weighted average interest
rate for the year ended December 31, 2014, which was 2.2%. All of our credit and loan facilities are denominated in U.S. dollars.



Inflation



Inflation has only a moderate effect on our
expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures
would increase our operating, voyage, administrative and financing costs.



Critical Accounting Policies



The discussion and analysis of our financial
condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance
with IFRS as issued by the IASB. The preparation of those consolidated financial statements requires us to make estimates and judgments
that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and
liabilities at the date of our consolidated financial statements. Actual results may differ from these estimates under different
assumptions and conditions.



Critical accounting policies are those that
reflect significant judgments of uncertainties and potentially result in material different results under different assumptions
and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve
a comparatively higher degree of judgment in their application. For a description of all our significant accounting policies, see
Note 2 to our consolidated financial statements included in this annual report on Form 20-F.



Our ability to continue as a going concern



When assessing our ability to continue as a
going concern, our management must make judgments and estimates about various aspects of our business, including the following:



| | Ø | plans
to raise new funds, restructure our debt and reorganize our capital structure;
| | - | ------------------------------------------------------------------------------------



| | Ø | the timing and amount of cash flows from operating activities;
| | - | --------------------------------------------------------------



| | Ø | the marketability of assets to be disposed of and the timing and amount of related cash proceeds
to be used to repay our indebtedness;
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | Ø | plans to reduce and delay our expenditures;
| | - | -------------------------------------------



| | Ø | our ability to comply with the various debt covenants; and
| | - | ----------------------------------------------------------



| | Ø | the present and future regulatory, business, credit and competitive environment in which we operate.
| | - | ----------------------------------------------------------------------------------------------------



These factors individually and collectively
will have a significant effect on our financial condition and results of operations and on our ability to generate sufficient cash
to repay our indebtedness as it becomes due. All of our vessels are pledged as collateral to a bank, and therefore if we were to
sell one or more vessels, the net proceeds of such sale would be used first to repay the outstanding debt to which the vessel is
collateralized with, and the remainder, if any, would be for our use, subject to the terms of our remaining loan and credit arrangements.
However, the doubts raised relating to our ability to continue as a going concern may make our securities an unattractive investment
for potential investors.



On February 8, 2017 the Company signed a share
and warrant purchase agreement providing for the issuance, for gross proceeds of $5 million, of an aggregate of 5 million shares
of common stock, par value $0.004 per share and warrants to purchase 25 million shares of common stock at a price of $1.60 per
share, in a private placement to a group of private investors. The Company has used a portion of, and intends to use the remaining,
proceeds from the sale of common shares and warrants for general corporate purposes and working capital including repayment of
debt. In connection with the February 2017 private placement, the Company terminated an aggregate of $20 million of the outstanding
principal and interest of the Firment and Silaner Credit Facilities in exchange for issuing 20 million shares and warrants exercisable
for 7,380,017 common shares at a price of $1.60 per share to nominees of the lenders. Both lenders are related parties to the Company.



67







Impairment of Long-Lived Assets: We
assess at each reporting date whether there is an indication that a vessel may be impaired. The vessel’s recoverable amount
is estimated when events or changes in circumstances indicate the carrying value may not be recoverable.



If such indication exists and where the carrying
value exceeds the estimated recoverable amounts, the vessel is written down to its recoverable amount. The recoverable amount is
the greater of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted
to their present value using a discount rate that reflects current market assessments of the time value of money and the risks
specific to the vessel. This assessment is made at the individual vessel level as separately identifiable cash flow information
for each vessel is available. We determine the fair value of our assets based on management estimates and assumptions and by making
use of available market data and taking into consideration third party valuations.



Discounted future cash flows for each vessel
were determined and compared to the vessel’s carrying value. The projected net discounted future cash flows for the first
three years were determined by considering an estimate daily time charter equivalent based on the most recent blended (for modern
and older vessels) FFA (i.e. Forward Freight Agreements) time charter rate for the remaining year of 2017, 2018 and 2019 respectively,
for each type of vessel. For the remaining useful life of the vessels the Company used the historical ten-year blended average
one-year time charter rates substituting for the years 2007, 2008 and 2016 that were considered as extreme values, with the years
2004, 2005 and 2006. The rates were adjusted assuming an annual growth rate of 1.7% as published by the International Monetary
Fund, net of commissions. Expected outflows for scheduled vessels maintenance were taken into consideration as well as vessel operating
expenses assuming an average annual inflation rate of approximately 4% every two years. The average time charter rates used were
in line with the overall chartering strategy, especially in periods/years of depressed charter rates; reflecting the full operating
history of vessels of the same type and particulars with the Company’s operating fleet (Supramax and Panamax vessels with
a deadweight tonnage (“dwt”) of over 50,000 and 70,000, respectively) and they covered at least one full business cycle.
The average annual inflation rate applied on vessels’ maintenance and operating costs approximated current projections for
global inflation rate for the remaining useful life of the Company’s vessels. Effective fleet utilization was assumed at
90% (including ballast days), taking into account the period(s) each vessel is expected to undergo her scheduled maintenance (drydocking
and special surveys), as well as an estimate of the period(s) needed for finding suitable employment and off-hire for reasons other
than scheduled maintenance, assumptions in line with the Company’s expectations for future fleet utilization under the current
fleet deployment strategy.



In addition, in terms of our estimates for
the charter rates for the unfixed period, we consider that the FFA for the remaining year of 2017, which is applied in our model
for the first three year period, approximates historical low levels and fully reflects the conceivable downside scenario. We, however,
sensitized our model with regards to freight rate assumptions for the unfixed period beyond the first three years. Our sensitivity
analysis revealed that, to the extent the historical rates would not decline by more than a range of 19% to 30%, depending on the
vessel, we would not require to recognize additional impairment.



Impairment losses are recognized in the consolidated
statement of comprehensive (loss)/income. A previously recognized impairment loss is reversed only if there has been a change in
the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is
the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
Such reversal is recognized in the consolidated statement of comprehensive income. After such a reversal, the depreciation charge
is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis
over its remaining useful life.



During the year ended December 31, 2016, we
did not recognize an impairment loss.



During the year ended December 31, 2015, we
recognized an impairment loss of $7.7 million due to the sale of m/v Tiara Globeand an impairment loss of $12.4 million
for m/v Energy Globeas we concluded that the recoverable amount of the vessel was lower than its carrying amount.



During the year ended December 31, 2014, we
recognized an impairment reversal of $2.2 million with reference to m/v Tiara Globe. As of December 31, 2014, the Company
decided that such vessel no longer met the criteria to be classified as held for sale and was subsequently measured at its recoverable
amount at that date of $13.6 million resulting in an impairment reversal of $2.2 million. As of December 31, 2014, no impairment
loss was recognized as our vessels’ recoverable amounts, excluding m/v Tiara Globe, exceeded their carrying amounts.



68







Although we believe that the assumptions used
to evaluate impairment are reasonable and appropriate, these assumptions are highly subjective and we are not able to estimate
the variability between the assumptions used and actual results that is reasonably likely to result in the future.



As of December 31, 2016, we owned and
operated a fleet of five vessels, with an aggregate carrying value of $91.8 million. The carrying value of each of our vessels
does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. Our estimates
of the market values assume that the vessels are in good and seaworthy condition without need for repair and, if inspected, would
be certified as being in class without any recommendations of any kind. Because vessel values are highly volatile, these estimates
may not be indicative of either current or future prices that we could achieve if we were to sell any of the vessels. As of December 31,
2015, we owned and operated a fleet of six vessels, with an aggregate carrying value of $110.1 million. As our impairment test
(as described in “—Impairment of Long-Lived Assets”) showed that the recoverable amount of m/v Energy
Globe was lower than its carrying amount we recognized an impairment loss of $12.4 million in 2015.



A vessel-by-vessel carrying value summary as
of December 31, 2016 and 2015 follows:



|Dry bulk Vessels                  |  | Dwt |        |  | Year Built |  |      | Month and Year
    of Acquisition |  |  | Purchase Price (in
    millions of U.S. Dollars)       |  |  | Carrying Value
    as of December 31, 2016 (in millions of U.S. Dollars) |      |  | Carrying Value
    as of December 31, 2015(in millions of U.S. Dollars) | 
|--------------------------------- |  | --- | ------ |  | ---------- |  | ---- | --------------------------------- |  |  | ------------------------------------------------------ |  |  | ------------------------------------------------------------------------ | ---- |  | ----------------------------------------------------------------------- | 
|m/v River Globe                   |  |     | 53,627 |  |            |  | 2007 |                                   |  |  | December
                                         2007 |  |  |                                                                          | 57.5 |  |                                                                         | 
|m/v Sky Globe                     |  |     | 56,855 |  |            |  | 2009 |                                   |  |  | May 2010                                               |  |  |                                                                          | 32.8 |  |                                                                         | 
|m/v Star Globe                    |  |     | 56,867 |  |            |  | 2010 |                                   |  |  | May 2010                                               |  |  |                                                                          | 32.8 |  |                                                                         | 
|m/v Sun Globe                     |  |     | 58,790 |  |            |  | 2007 |                                   |  |  | September 2011                                         |  |  |                                                                          | 30.3 |  |                                                                         | 
|m/v Moon Globe                    |  |     | 74,432 |  |            |  | 2005 |                                   |  |  | June 2011                                              |  |  |                                                                          | 31.4 |  |                                                                         | 
|m/v Energy Globe (ex Jin Star)(1) |  |     | 79,387 |  |            |  | 2010 |                                   |  |  | June 2010                                              |  |  |                                                                          | 41.1 |  |                                                                         | 
|                                  |  |     |        |  |            |  |      |                                   |  |  |                                                        |  |  |                                                                          |      |  |                                                                         | 
|                                  |  |     |        |  |            |  |      |                                   |  |  |                                                        |  |  |                                                                          |      |  |                                                                         | 



(*) As of December 31, 2016
the estimated charter free market value of all of our vessels was lower than their carrying value.

(1) Kelty Marine Ltd., the company that
owned the m/v Energy Globe, was sold in March 2016.



Vessels, net: Vessels are stated at
cost, less accumulated depreciation (including depreciation of drydocking costs and component attributable to favorable or unfavorable
lease terms relative to market terms) and accumulated impairment losses. Vessel cost consists of the contract price for the vessel
and any material expenses incurred upon acquisition (initial repairs, improvements and delivery expenses, interest and on-site
supervision costs incurred during the construction periods). Any seller’s credit, which is the amounts received from the
seller of the vessels until date of delivery, is deducted from the cost of the vessel. Subsequent expenditures for conversions
and major improvements are also capitalized when the recognition criteria are met. Otherwise, these amounts are charged to expenses
as incurred.



Vessels Depreciation: The cost of each
of the Company’s vessels is depreciated on a straight-line basis over each vessel’s remaining useful economic life,
after considering the estimated residual value of each vessel, beginning when the vessel is ready for its intended use. Management
estimates that the useful life of new vessels is 25 years, which is consistent with industry practice. The residual value of a
vessel is the product of its lightweight tonnage and estimated scrap value per lightweight ton. The residual values and useful
lives are reviewed at each reporting date and adjusted prospectively, if appropriate. Depreciation is based on the cost of the
vessel less its estimated residual value. Secondhand vessels are depreciated from the date of their acquisition through their remaining
estimated useful lives. A decrease in the useful life of a vessel or in its residual value would have the effect of increasing
the annual depreciation charge. When regulations place limitations over the ability of a vessel to trade on a worldwide basis,
its useful life is adjusted to end at the date such regulations become effective. During the fourth quarter of 2015 we reduced
the scrap rate from $335/ton to $240/ton due to the reduced scrap rates worldwide. This resulted to an extra depreciation expense
of $91,000 included in the consolidated statement of comprehensive loss/income for 2015. During the second quarter of 2016 we further
reduced the scrap rate from $240/ton to $200/ton due to the reduced scrap rates worldwide. This resulted to an extra depreciation
expense of $95,600 included in the consolidated statement of comprehensive loss/income for 2016.



69







Drydocking costs: Vessels are required
to be drydocked for major repairs and maintenance that cannot be performed while the vessels are operating. Drydockings occur approximately
every 2.5 years. The costs associated with the drydockings are capitalized and depreciated on a straight-line basis over the period
between drydockings, to a maximum of 2.5 years. At the date of acquisition of a vessel, management estimates the component of the
cost that corresponds to the economic benefit to be derived until the first scheduled drydocking of the vessel under our ownership
and this component is depreciated on a straight-line basis over the remaining period through the estimated drydocking date. Costs
capitalized are limited to actual costs incurred, such as shipyard rent, paints and related works and surveyor fees in relation
to obtaining the class certification. If a drydocking is performed prior to the scheduled date, the remaining unamortized balances
of previous drydockings are immediately written off. Unamortized balances of vessels that are sold are written off and included
in the calculation of the resulting gain or loss in the period of the vessel’s sale.



Amortization of lease component: When
we acquire a vessel subject to a time charter, we amortize the amount of the component attributable to the favorable or unfavorable
terms of the time charter relative to market terms which is included in the cost of that vessel, over the remaining term of the
time charter.



Non-current assets held for sale: Non-current
assets and disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to
sell. We determine the fair value of our assets based on management estimates and assumptions and by making use of available market
data and taking into consideration third party valuations. If the carrying amount exceeds fair value less costs to sell, we recognize
a loss under impairment loss in the income statement component of the consolidated statement of comprehensive income. Non-current
assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal
group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected
to qualify for recognition as a complete sale within one year from the date of classification. Events or circumstances may extend
the period to complete the sale beyond one year. An extension of the period required to complete a sale does not preclude an asset
from being classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and
there is sufficient evidence that the entity remains committed to its plan to sell the asset. Property, plant and equipment and
intangible assets once classified as held for sale are not depreciated or amortized. If the Company has classified an asset as
held for sale but the criteria discussed above are no longer met, the Company ceases to classify the asset as held for sale. The
Company measures a non-current asset that ceases to be classified as held for sale at the lower of (1) its carrying amount before
the asset was classified as held for sale, adjusted for any depreciation, amortization or revaluation that would have been recognised
had the asset not been classified as held for sale and (2) its recoverable amount at the date of the subsequent decision to cease
classifying the asset as held for sale.



Trade receivables, net: The amount shown
as trade receivables at each financial position date includes estimated recoveries from charterers for hire, freight and demurrage
billings, net of an allowance for doubtful accounts. Trade receivables are measured at amortized cost less impairment losses, which
are recognized in the consolidated statement of comprehensive income. At each financial position date, all potentially uncollectible
accounts are assessed individually for the purpose of determining the appropriate allowance for doubtful accounts. Although we
may believe that our provisions are based on fair judgment at the time of their creation, it is possible that an amount under dispute
will not be recovered and the estimated provision of doubtful accounts would be inadequate. If any of our revenues become uncollectible,
these amounts would be written-off at that time.



Derivative financial instruments: Derivative
financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
remeasured at fair value. The fair value of these instruments at each reporting date is derived principally from or corroborated
by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated
inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined. Changes in
the fair value of these derivative instruments are recognized immediately in the income statement component of the consolidated
statement of comprehensive income.



Share based payments:The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Estimating fair value for share-based payment transactions may require determination
of the most appropriate valuation model, which is depended on the terms and conditions of the grant. This estimate also requires
determination of the most appropriate inputs to the valuation model including, expected volatility and dividend yield and making
assumptions about them.



70







B.  Liquidity
and Capital Resources



As of December 31, 2016, we had $0.2 million
of “cash and cash equivalents” in bank deposits. We had also $0.2 million in “Restricted cash”. In addition
we had an amount of $2.6 million available to be drawn under the Firment Credit Facility.



As of December 31, 2016, we had an aggregate
debt outstanding of $65.8 million, which included $26 million from HSH Facility, $19.3 million from the DVB Loan Agreement, $17.4
million from the Firment Credit Facility issued for the purpose of financing our general working capital needs and $3.1 million
from Silaner Credit Facility.



As of December 31, 2015, we had $2.0 million
of “cash and cash equivalents” that consisted of $0.3 million cash on hand and cash at banks and $1.8 million in bank
deposits. In addition we had an amount of $5.4 million available to be drawn under the Firment Credit Facility.



As of December 31, 2015, we had an aggregate
debt outstanding of $78.6 million, which included $27.3 million from the HSH Facility, $15.7 million from the Kelty Loan Agreement,
$21.0 million from the DVB Loan Agreement and $14.6 million from the Firment Credit Facility.



Please see “Item 5.B. Liquidity and Capital
Resources—Indebtedness” for further information about our loan agreements and credit facilities.



Our primary uses of funds have been capital
expenditures for the acquisition of vessels, vessel operating expenses, general and administrative expenses, expenditures incurred
in connection with ensuring that our vessels comply with international and regulatory standards, financing expenses and repayments
of bank loans and payments of dividends to our shareholders. We do not have any commitments for newbuilding contracts.



Since our operations began in 2006, we have
financed our capital requirements mainly through equity subscriptions from shareholders, long-term bank debt and cash from operations,
including cash from sales of vessels. To finance further vessel acquisitions of either new or secondhand vessels, we anticipate
that our primary sources of funds will be our current cash, cash from continuing operations, additional indebtedness to be raised
and, possibly, future equity or debt financings.



Working capital, which is current assets, minus
current liabilities, including the current portion of long-term debt and non-current assets and associated liabilities classified
as held for sale, amounted to a working capital deficit of $29 million as of December 31, 2016 and to a working capital deficit
of $64.9 million as of December 31, 2015. If we are unable to satisfy our liquidity requirements, we may not be able to continue
as a going concern. All of our vessels are pledged as collateral to a bank, and therefore if we were to sell one or more vessels,
the net proceeds of such sale would be used first to repay the outstanding debt to which the vessel collateralized, and the remainder,
if any, would be for our use, subject to the terms of our remaining loan and credit arrangements. The doubts raised relating to
our ability to continue as a going concern may make our securities an unattractive investment for potential investors.



On February 8, 2017 the Company signed a share
and warrant purchase agreement providing for the issuance, for gross proceeds of $5 million, of an aggregate of 5 million shares
of common stock, par value $0.004 per share and warrants to purchase 25 million shares of common stock at a price of $1.60 per
share, in a private placement to a group of private investors. The Company has used a portion of, and intends to use the remaining,
proceeds from the sale of common shares and warrants for general corporate purposes and working capital including repayment of
debt.



Current liabilities as of December 31, 2015,
included the total amount outstanding of $27.3 million with respect to the HSH Loan Agreement with HSH Nordbank AG, the total amount
outstanding of $15.65 million with respect to the Kelty Loan Agreement with Commerzbank and the total amount of $21.0 million with
respect to the DVB Loan Agreement with DVB Bank SE.



In December 2013, we entered into a credit
facility for up to $4.0 million with Firment Trading Limited, a company related to us, for the purpose of financing our general
working capital needs. During December 2014, the credit limit of the facility increased from $4.0 to $8.0 million. During December
2015, the credit limit of the facility increased from $8.0 to $20.0 million. In December 2015, the Firment Credit Facility was
assigned from Firment Trading Limited, a Cypriot company, to Firment Trading Limited, a Marshall Islands corporation, each of which
is a company related to us. We have the right to drawdown any amount up to $20.0 million or prepay any amount, during the availability
period, in multiples of $0.1 million. As of December 31, 2016 we had $17.4 million drawn under the Firment Credit Facility



71







In January 2016, we entered into a credit facility
for up to $3.0 million with Silaner Investments Limited, a company related to us, for the purpose of financing our general working
capital needs. Any prepaid amount could be re-borrowed in accordance with the terms of the facility. As of December 31, 2016 we
had $3.1 million drawn under the Silaner Credit Facility, which amount has been approved by our board.



In connection with the February 2017
private placement, the Company terminated on February 8, 2017 an aggregate of $20 million of the outstanding principal
and interest of the Firment Credit Facility and Silaner Credit Facility in exchange for issuing 20 million shares and
warrants exercisable for 7,380,017 common shares at a price of $1.60 per share to nominees of the lenders. Both lenders are
related parties to the Company. On February 10, 2017 the then outstanding balance ($1,713,000) of the Firment and Silaner
Credit Facilities were fully repaid.



Based on the Company’s cash flow projections
for the period ending March 31, 2018 and taking into consideration the agreements reached in principal with the banks (which remain
subject to final documentation) and the new agreements (in connection with the February 2017 private placement discussed above)
with Firment Trading Limited and Silaner Investments Limited, the Company believes it will be in position to have sufficient liquidity
to cover its debt payments and finance its operations until the end of first quarter of 2018.



Cash Flows

Cash and cash equivalents were $0.2 million
in bank deposits as of December 31, 2016, $2.0 million as of December 31, 2015 and $5.1 million as of December 31, 2014.



Restricted cash that consist of cash pledged
as collateral was $0.2 at the end of 2016, $0.5 million at the end of 2015 and $1.0 million at the end of 2014. We consider highly
liquid investments such as bank time deposits with an original maturity of three months or less to be cash equivalents.



Net Cash (Used In) / Generated
From Operating Activities

Net cash used in operating activities in 2016
amounted to $3.6 million compared to net cash used in operating activities of $0.1 million in 2015. The decrease is primarily attributable
to a decrease in the general shipping rates and average TCE rates achieved by the vessels in our fleet.



Net cash used in operating activities in 2015
amounted to $0.1 million compared to net cash generated from operating activities of $9.5 million in 2014. The decrease is primarily
attributable to a decrease in the general shipping rates and average TCE rates achieved by the vessels in our fleet.



Net Cash (Used In)/ Generated
From Investing Activities

Net cash generated from investing activities
was $0.4 million during the year ended December 31, 2016, which was mainly attributable to net proceeds from the sale of one of
our subsidiaries.



Net cash generated from investing activities
was $5.4 million during the year ended December 31, 2015, which was mainly attributable to $5.3 million net proceeds from the sale
of a vessel.



We had no significant investing activities
during 2014.



Net Cash (used in)/ generated
from Financing Activities

Net cash generated from financing activities
during the year ended December 31, 2016 amounted to $1.4 million and consisted of $5.9 million in proceeds drawn from the Firment
and Silaner Credit Facilities entered into for financing general working capital needs, reduced by $3.1 million of indebtedness
that we repaid under our existing credit and loan facilities, a $0.3 million decrease of pledged bank deposits and $1.7 million
of interest paid.



Net cash used in financing activities during
the year ended December 31, 2015 amounted to $8.4 million and consisted of $45.5 million of indebtedness that we repaid under our
existing credit and loan facilities, $0.5 million paid on our Series A Preferred Shares, a $0.5 million decrease of pledged bank
deposits, $2.4 million of interest paid, reduced by $39.5 million in proceeds drawn from the Firment Credit Facility entered into
for financing general working capital needs and from the HSH Loan Agreement entered into for part refinancing our then existing
credit facility with Credit Suisse AG.



Net cash used in financing activities during
the year ended December 31, 2014 amounted to $9.3 million and consisted of $12.4 million of indebtedness that we repaid under our
existing credit and loan facilities, $0.4 million paid on our Series A Preferred Shares, $2.0 million of interest paid, reduced
by $5.5 million in proceeds drawn from the Firment Credit Facility entered into for financing general working capital needs.



72







Indebtedness



We operate in a capital intensive industry
which requires significant amounts of investment, and we fund a portion of this investment through long-term bank debt.



As of December 31, 2016, 2015 and 2014, we
and our vessel-owning subsidiaries had outstanding borrowings under our Credit Facility, the Kelty Loan Agreement, the DVB Loan
Agreement, HSH Loan Agreement, the Firment Credit Facility and the Silaner Credit Facility of an aggregate of $65.8 million, $78.6
million and $84.6 million, respectively.



Credit Facility



General



In November 2007, Globus Maritime Limited entered
into a $120.0 million secured reducing revolving Credit Facility with Credit Suisse AG, which was supplemented from time to time.
Our Credit Facility was available to us in connection with vessel acquisitions by our vessel-owning subsidiaries as well as for
working capital purposes. During February 2015, we entered into a new loan agreement with HSH Nordbank AG, the HSH Loan Agreement,
for up to $30.0 million for the purpose of part refinancing our existing Credit Facility with Credit Suisse AG. In March 2015,
we prepaid $30.0 million to Credit Suisse AG, and the remaining amount outstanding of $5.0 million was paid in July 2015.



Our Credit Facility permitted us to borrow
funds up to the reducing facility limit which began at $120.0 million and which was reduced on “Reduction Dates” every
six months (in May and November) according to the following agreed schedule: (1) by $10.0 million on each of the first to fourth
Reduction Dates, inclusive, (2) by $4.5 million on each of the fifth to fifteenth Reduction Dates, inclusive, and (3) by $30.5
million on the sixteenth and final Reduction Date, which was November 2015. Consequently, on every Reduction Date that the outstanding
balance exceeded the applicable reduced facility limit, we were required to pay a principal installment to the bank to ensure that
the outstanding balance remained at or below the applicable facility limit.



We were permitted to voluntarily prepay principal
installments to the bank without penalty at any time between Reduction Dates. Such voluntarily prepaid principal amounts became
undrawn amounts under the Credit Facility and we could have re-borrowed such amounts, or parts thereof, subject to the reducing
facility limit. Our Credit Facility had commitment fees of 0.25% per annum on any undrawn amounts under the facility, other than
undrawn amounts relating to approximately $14.9 million, in which the commitment fee was 0.5%. Interest on outstanding balances
was historically payable at 0.95% per annum over LIBOR, except when the aggregate security value of the mortgaged vessels is more
than 200% of the outstanding balances, in which case the interest was 0.75% per annum over LIBOR. The interest rate was changed
as of March 31, 2014. Please see “–Revisions to Credit Facility” below.



Our ability to borrow amounts under our Credit
Facility was subject to satisfaction of certain customary conditions precedent and compliance with terms and conditions included
in our Credit Facility documentation. To the extent that the vessels in our fleet that secure our obligations under our Credit
Facility were insufficient to satisfy minimum security requirements, we were required to grant additional security or obtain a
waiver or consent from the lender.



Security



Our obligations under our Credit Facility were
secured by a first preferred mortgage on four vessels (the m/v Tiara Globe, m/v River Globe, m/v Sky Globe
and m/v Star Globe). Our Credit Facility was later secured by the m/v Tiara Globe. Our Credit Facility was also secured
by a first priority assignment of any time charter or other contract of employment of any vessel that acts as security, a first
priority account pledge over the operating account of the vessel-owning company and an assignment of the vessel’s insurances
and earnings and assignment of any hedging agreement. Each of the vessel-owning subsidiaries that owns a vessel pledged as security
under our Credit Facility guaranteed our obligations under the facility. In February 2015, we paid down certain aspects of our
Credit Facility, and certain of the security was released. See “–Credit Facility-Revisions to Credit Facility”
for more information.



Covenants



Our Credit Facility contained financial and
other covenants. During December 2012 and December 2014, we agreed with Credit Suisse to amend our Credit Facility and waive certain
covenants, which agreements were memorialized by supplemental agreements in March 2013 and February 2015, respectively, covering
the periods from December 28, 2012 to March 31, 2014 (“first waiver period”) and from December 31, 2014 to November
30, 2015 (“second waiver period”) respectively. The covenants as amended provided that:



73







| | Ø | The aggregate charter free-market value of the mortgaged vessels during the first waiver period
should have equaled or exceeded 110% (instead of 133%) of the outstanding balance under the facility, minus the aggregate amount,
if any, standing to the credit of our operating accounts or any bank accounts opened with the lender, which are subject to an encumbrance
in favor of the lender and designated as a “security account” by the lender for purposes of the Credit Facility. As
of December 31, 2014 and 2013, the ratio was 181% and 172% respectively;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | During the first waiver period Credit Suisse fully waived the requirement that the ratio of our
consolidated market adjusted net worth to our total assets should have exceeded 35% at all times. During the second waiver period
Credit Suisse reduced its requirement to 15%. As of December 31, 2014 and 2013, the ratio was 29% and 37%, respectively, corresponding
to a $11.3 million shortfall and a $5.3 million excess amount of the required amount based on the fair market value of the fleet
respectively when compared to the original minimum requirement of 35%;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | During the first waiver period Globus should have had consolidated cash and cash equivalents, not
less than the greater of (1) $5.0 million (instead of $10.0 million) and (2) the sum determined by the bank to be the aggregate
of the total principal amount of all borrowed money and interest accruing thereon, payable by the Company and which falls due in
the six-month period commencing on any relevant day. This minimum liquidity requirement however, was changed permanently as of
March 31, 2014. Please see “–Revisions to Credit Facility” below;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Globus was not permitted to pay dividends on its common shares during the first waiver period;
Restriction on dividend payments was changed permanently as of March 31, 2014. Please see “–Revisions to Credit Facility”
below;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | During the first waiver period, our Credit Facility bore interest at LIBOR plus a margin of 2.10%
while during the second waiver period the facility to bear interest at LIBOR plus a margin of 2.00% on the amounts outstanding
as of March 25, 2015 (“test date”). For any amounts prepaid before the test date, the facility to bear interest at
LIBOR plus a margin of 1.20%; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Mr. George Feidakis maintains at least 35% of our total issued voting share capital.
| | - | ------------------------------------------------------------------------------------



Revisions to Credit Facility

During March 2014, the Company reached an agreement
with Credit Suisse to permanently revise certain terms of our Credit Facility. The Company agreed with Credit Suisse that:



| | Ø | The Company must maintain cash and cash equivalents of not less than $5.0 million conditional on
the Company not declaring and paying dividends to common shareholders. In the event of dividend payment, the Company must maintain
cash and cash equivalents of not less than $7.0 million and must maintain such amount during a continuous period of at least three
months following the dividend payment, upon which the minimum amount will be reduced to the $5.0 million requirement.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | From March 31, 2014 onwards the Credit Facility bore interest at LIBOR plus a margin of 1.20%.
| | - | ----------------------------------------------------------------------------------------------



| | Ø | The Company was prohibited from paying dividends to the holders of preferred shares in an amount
that exceeded $0.5 million per fiscal year when cash and cash equivalents of the Company was less than $7.0 million.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Credit Facility also contained general
covenants that required us to comply with the ISPS Code, carry all required licenses and provide consolidated financial statements
to the bank. In addition, our Credit Facility included customary events of default, including those relating to a failure to pay
principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and non-compliance
with security documents. We were permitted, prior to the supplemental agreements and revisions described above, to pay dividends
in respect of any of our financial quarters (other than during the waiver period described above) so long as we were not in default
of our Credit Facility at the time of the declaration or payment of the dividends nor would a default occur as a result of the
declaration or payment of such dividends.



74







As of December 31, 2014, we had a $35.0 million
outstanding balance under our Credit Facility which was equal to our Credit Facility. Our Credit Facility was fully repaid in 2015.



During February 2015, we entered into a new
loan agreement with HSH Nordbank AG, which we refer to as the HSH Loan Agreement, for up to $30.0 million for the purpose of a
partial refinancing of our Credit Facility. In March 2015, we prepaid $30.0 million to Credit Suisse reducing the outstanding balance
under the Credit Facility to $5.0 million which was settled in July 2015 from the proceeds from the sale of m/v Tiara Globe.
With effect of the prepayment, Credit Suisse released its securities over m/v River Globe, m/v Star Globe
and m/v Sky Globe as well as the securities over their respective vessel-owning subsidiaries. Our Credit Facility
was fully repaid in 2015.



As of December 31, 2014 we were in compliance
with the covenants of our Credit Facility, as amended and in effect.



DVB Loan Agreement



In June 2011, Globus through its wholly owned
subsidiaries, Artful Shipholding S.A. and Longevity Maritime Limited, entered into the DVB Loan Agreement for an amount up to $40.0
million with DVB Bank SE and used funds borrowed thereunder to finance part of the purchase price for the m/v Moon Globe
and m/v Sun Globe. Globus acts as guarantor for this loan.



In June 2011, $19.0 million was drawn (Tranche
A) for the purpose of partly financing the acquisition of the m/v Moon Globe. Tranche A was originally payable in 30 quarterly
installments of $440,000 and a balloon payment of $5.3 million payable together with the 30th and last installment payable in December
2018. Subsequent to the third waiver and the amendments to be made pursuant to the agreement reached in March 2017 described below,
Tranche A will payable in 26 quarterly installments of $440,000 and a balloon payment of $7.1 million payable together with the
26th and last installment payable in December 2018. As of December 31, 2016, the outstanding principal balance of Tranche A was
$9.7 million.



In September 2011, $18.0 million was drawn
(Tranche B) for the purpose of partly financing the acquisition of the m/v Sun Globe. Tranche B was originally payable in
30 quarterly installments of $416,250 and a balloon payment of $5.0 million payable together with the 30th and last installment
payable in March 2019. Subsequent to the third waiver and the amendments to be made pursuant to the agreement reached in March
2017 described below, Tranche B will be payable in 26 quarterly installments of $416,250 and a balloon payment of $6.7 million
payable together with the 26th and last installment payable in March 2019. As of December 31, 2016, the outstanding principal balance
of Tranche B was $9.6 million.



The DVB Loan Agreement contains the following
provisions:



Interest

Interest on outstanding loan balances are payable
at LIBOR plus 2.5% per annum and any outstanding amount under the DVB Loan Agreement may be prepaid in a multiple of $500,000 with
five days business prior written notice. A variable prepayment fee applied in case of refinancing of the DVB loan agreement by
another lender within the first three years of a new loan, but was not applicable in case of the sale of a vessel or repayment
of such facility by equity.



Security



The obligations under the DVB Loan Agreement
is secured by, among other things, a first priority mortgage on the m/v Sun Globe and the m/v Moon Globe, as well
as assignment of the time charters and assignments of earnings, insurances and requisition compensation and relevant account pledges.



Covenants



The DVB Loan Agreement contains financial and
other covenants. We have agreed with DVB Bank to amend our loan agreement and waive certain covenants in various agreements which
were memorialized by supplemental agreements in April 2013, February 2015 and April 2016, covering the periods from December 31,
2012 to March 31, 2014 (“first waiver period”), from December 31, 2014 to March 30, 2016 (“second waiver period”)
and from March 1, 2016 to March 31, 2017 (“third waiver period”), respectively. Also in March 2017, the Company reached
an agreement in principle with DVB Bank SE (which remain subject to definite documentation) to amend the DVB Loan Agreement, including
amendments to relax or waive certain covenants for the period from April 1, 2017 to April 1, 2018 (“Restructuring period”).
The covenants as in effect, and the covenants to be in effect subsequent to the amendments to be made pursuant to the March 2017
agreement, will provide that:



75







| | Ø | During the first waiver period the aggregate charter free-market value of the mortgaged vessels
should have equaled or exceed 107% (instead of 120% during the first two years and 130% thereafter) of the outstanding balance
under the DVB Loan Agreement less any cash held in DVB Bank’s account and pledged to DVB Bank up to $1.0 million. During
the second waiver period the required percentage was set at 110%. During the third waiver period the required percentage was set
at 50%. During the Restructuring period the required percentage must equal or exceed 50% of the outstanding loan balance for the
period from April 1, 2017 to December 31, 2017, for the period from January 1, 2018 to June 30, 2018 the percentage becomes 105%
and after June 30, 2018 will become 130%. As of December 31, 2016 and 2015, the aggregate fair market value of the Mortgaged vessels
was approximately 91% for both years of the outstanding balance under the DVB Loan Agreement less any cash pledged to DVB Bank;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | A quarterly cash sweep mechanism was put into effect in April 2013 and implemented on all vessels
mortgaged under the DVB Loan Agreement on an individual vessel basis until the security value equals or exceeds 130% of the loan
outstanding. Under this mechanism, all earnings of these vessels after operating expenses, drydocking provision, general and administrative
expenses and debt service, if any, are to be used as applied towards the balloon payment of the relevant tranche. During the period
from September 28, 2017 to June 14, 2018 the cash sweep will include all earnings of the vessels after operating expenses and drydocking
provision up to $6,700 per day per vessel, to be applied toward interest expense, deferred payments, restoration of a minimum liquidity
up to $500,000 per owner and the balloon payment in that order;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | During both the first and the second waiver periods Globus should maintain a minimum market adjusted
net worth of more than $20.0 million (instead of $50.0 million) and a minimum liquidity of $5.0 million (instead of the lesser
of $10.0 million and $1.0 million per vessel owned by us). As of December 31, 2014 the market adjusted net worth of Globus was
$36.2 million. During the third waiver period the application of this clause is waived so long as Globus is not otherwise in default
under the DVB Loan Agreement and no legal proceeding has been taken against it or any of its subsidiaries for an amount exceeding
$500,000. During the Restructuring period this clause is waived;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | During both the first and the second waiver periods the ratio of our market adjusted net worth
to our total assets must be greater than 15% (instead of 35%). As of December 31, 2014 the ratio was 29% corresponding to $11.3
million shortfall of the required fair market value of the fleet respectively when compared to the original minimum requirement
of 35%. During the third waiver period the application of this clause is waived so long as Globus is not otherwise in default under
the DVB Loan Agreement and no legal proceeding has been taken against it or any of its subsidiaries for an amount exceeding $500,000.
During the Restructuring period this clause is waived;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Globus was permitted to pay dividends on its common shares until the first waiver period provided
that no event of default had occurred and was continuing at the time of declaration or payment of such dividends, nor would result
from the declaration or payment of such dividends. During the first waiver period Globus may pay dividends to the holders of preferred
shares in an aggregate amount that will not exceed $500,000 per fiscal year. During the third waiver period and at any time thereafter
except during the Restructuring Period, Globus is allowed to pay dividends to its shareholders provided that (i) no event of default
has occurred and is continuing at the time of declaration or payment of such dividends, nor would result from the declaration or
payment of such dividends and (ii) there is no less than $500,000 standing to the credit of each minimum liquidity account at the
time of declaration or payment of the dividends and (iii) the amount of each balloon payment is not more than $5,300,000 in respect
of the Artful advance and not more than $5,012,500 in respect of the Longevity advance at the time of declaration or payment of
the dividends. During the Restructuring period no dividend payments will be permitted;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | The vessel-owning subsidiaries that own a vessel pledged as security under the DVB Loan Agreement
will each maintain a minimum liquidity of $500,000 except during the Restructuring Period. During the third waiver period this
obligation is waived and the amount deposited from time to time in such Account will not be more than $500,000 in aggregate. During
the Restructuring period this clause is waived;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Mr. George Feidakis maintain at least 35% of our total voting share capital;
| | - | ----------------------------------------------------------------------------



| | Ø | We maintain our listing on a major stock exchange in the United States, Europe or Asia.
| | - | ---------------------------------------------------------------------------------------



76







| | Ø | In connection to the agreement reached in March 2017 Firment Shipping Inc. will provide a letter
of undertaking to contribute the $1.7 million payment to the Company if necessary; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | In connection to the agreement reached in March 2017 the ultimate beneficial owner of Firment Shipping
Inc. will provide a letter of undertaking to pledge its shares of the Company in the event of a breach of certain financial covenants
during the period from January 1, 2018 to June 30, 2018.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The amendments with respect to the first waiver
are subject to $1.0 million prepayment, which was paid in April 2013. The prepayment was applied against the balloon payment.



The amendments with respect to the second waiver
period are subject to a $3.4 million prepayment initially agreed to be paid no later than June 30, 2015, and subsequently verbally
agreed to be paid at the dates of the original repayment schedule, and which we paid at such installment times.



The amendments with respect to the third waiver
were subject to $1.7 million prepayment, which was paid in April 2016, and the number of quarterly payments and the amount of the
balloon payments were revised (as described above). The prepayment was applied against the four consecutive quarterly installments
following the prepayment.



The amendments with respect to the Restructuring
Period will be subject to a $1.7 million prepayment by September 2017, which is the aggregated amount of two quarterly installments
for each tranche, and another $1.7 million would be deferred to the balloon payment of each tranche.



As of December 31, 2015, we were not in compliance
with three loan covenants of the DVB Loan Agreement:



| | Ø | The
                                         aggregate charter free-market value of the mortgaged vessels did not exceed 107% of the
                                         outstanding balance under the DVB Loan Agreement less any cash held in DVB Bank’s
                                         account and pledged to DVB Bank up to $1.0 million. As of December 31, 2015, the ratio
                                         was approximately 92%.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Globus
                                         should maintain a minimum market adjusted net worth of more than $20.0 million and a
                                         minimum liquidity of $5.0 million. As of December 31, 2015 market adjusted net worth
                                         was $(24.5) million and the liquidity of the Company was $2.5 million.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | The
                                         ratio of our market adjusted net worth to our total assets should be greater than 15%.
                                         As of December 31, 2015 this ratio was -41%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2016, we were in compliance
with the loan covenants of the DVB Loan Agreement, as amended and in effect.



Kelty Loan Agreement



In June 2010, our wholly owned subsidiary,
Kelty Marine Ltd., entered into a $26.7 million loan agreement, which we refer to as the Kelty Loan Agreement, with Deutsche Schiffsbank
Aktiengesellschaft (now Commerzbank) and used funds borrowed thereunder to finance part of the purchase price for the m/v Energy
Globe (formerly called m/v Jin Star). We acted as guarantor for this loan. As described below, we reached a settlement
agreement terminating the Kelty Loan Agreement in March, 2016.



The Kelty Loan Agreement had a term of seven
years and was payable in 28 equal quarterly installments of $500,000 starting in September 2010, as well as a balloon payment of
$12.65 million payable together with the 28th and final installment payable in June 2017. Interest on outstanding balances under
the Kelty Loan Agreement was payable at LIBOR plus a variable margin. The applicable margin was determined on the basis of the
“loan to value ratio,” which is a fraction where the numerator was the principal amount outstanding under the Kelty
Loan Agreement and the denominator was the charter free market value of the m/v Energy Globe (formerly called m/v Jin
Star) and any amount of free liquidity maintained with Commerzbank. Set forth below is the margin that would have applied to
the loan, depending on the applicable loan to value ratio in any given application period:



|Loan to Value Ratio                                     |  | Margin |     
|------------------------------------------------------- |  | ------ | ----
|Less than 45%                                           |  |        | 2.25
|Equal or greater than 45% and less than or equal to 60% |  |        | 2.40
|Greater than 60% and less than or equal to 70%          |  |        | 2.50
|Greater than 70%                                        |  |        | 2.75



77









Kelty Marine could have prepaid the loan in
a minimum amount of $1 million and multiples thereof, up to $2 million per year without any penalty. The Kelty Loan Agreement had
a commitment fee of 0.5% per annum on the amount of the undrawn balance of the agreement through September 30, 2010, and had a
0.75% flat management fee on the loan amount. On April 29, 2013, the Company prepaid $3.0 million together with the scheduled installment
due on June 28, 2013 against its six following scheduled installment payments.



Security



The loan was secured by a first preferred mortgage
on the m/v Energy Globe (formerly called m/v Jin Star), assignment of insurances, earnings and requisition compensation
on the vessel and assignment of the bareboat charter.



Covenants



The Kelty Loan Agreement contained financial
and other covenants requiring Kelty Marine to, among other things, ensure that:

| | Ø | Kelty Marine did not undergo a change of control;
| | - | -------------------------------------------------

| | Ø | Kelty Marine and/or the Company maintained at least $1
million in minimum liquidity with Commerzbank;
| | - | -----------------------------------------------------------------------------------------------------

| | Ø | the ratio of our shareholders’ equity to total assets
was not less than 25%;
| | - | ----------------------------------------------------------------------------

| | Ø | we had a minimum equity of $50 million;
| | - | ---------------------------------------

| | Ø | the market value of the m/v Energy Globe (formerly
called m/v Jin Star) and any additional security provided, including the minimum liquidity with Commerzbank, was or exceeded
130% of the aggregate principal amount of debt outstanding under the Kelty Loan Agreement; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | Mr. George Feidakis and Mr. George Karageorgiou, our founders,
maintained in the aggregate at least 37% of the shareholding in us.
| | - | ----------------------------------------------------------------------------------------------------------------------------------



The Kelty Loan Agreement permitted us to declare
and pay dividends without prior written permission of the lender so long as there is no event of default under such agreement.



As of December 31, 2015, we were not in compliance
with the security value requirement that required the market value of the m/v Energy Globe (formerly called m/v Jin Star)
and any additional security provided, including the minimum liquidity with the lender, to be equal or greater than 130% (the actual
ratio we achieved was 80%) of the aggregate principal amount of debt outstanding under the Kelty Loan Agreement. We were not in
compliance with the minimum liquidity of $1 million with Commerzbank (the actual liquidity was $0.5 million) and the requirement
of a minimum equity of $50 million (the actual equity was $30.5 million). As of December 31, 2015, the outstanding principal balance
was $15.65 million.



In March 2016, we reached a settlement agreement
with Commerzbank relating to the Kelty Loan Agreement. Commerzbank agreed to settle the outstanding indebtedness of $15.65 million
plus the accrued interest of $112,000 in return of the consideration from the sale of the shares of Kelty Marine Ltd. for $6.86
million plus overdue interest of $40,708. If the total amount of cash and bank balances and bank deposits exceeds $10 million in
the aggregate as declared on June 30, 2016 then we would have been required to pay to Commerzbank any excess amounts. Because there
was no excess, Globus was released from its guarantee.



Firment Credit Facility



In December 2013, Globus Maritime Limited entered
into a credit facility for up to $4.0 million with Firment Trading Limited, a related party to us, for the purpose of financing
our general working capital needs. The Firment Credit Facility is unsecured and remains available until its final maturity date,
originally at December 12, 2015, when Globus Maritime Limited must repay all drawn and outstanding amounts at that time. During
December 2014 the credit limit of the facility increased from $4.0 to $8.0 million and its final maturity date was extended to
April 29, 2016. During December 2015 the credit limit of the facility increased from $8.0 to $20.0 million and its final maturity
date was extended to April 12, 2017. In December 2015, the Firment Credit Facility was assigned from Firment Trading Limited, a
Cypriot company, to Firment Trading Limited, a Marshall Islands corporation, each of which is a related party to us. We have the
right to drawdown any amount up to $20.0 million or prepay any amount, during the availability period in multiples of $100,000.
Any prepaid amount can be re-borrowed in accordance with the terms of the facility. Interest on drawn and outstanding amounts is
charged at 5% per annum and no commitment fee is charged on the amounts remaining available and undrawn.



78







As of December 31, 2016, 2015 and 2014, the
amounts drawn and outstanding with respect to the facility were $17.4, $14.6 and $7.5 million, respectively. As of December 31,
2016 and 2015, there was an amount of $2.6 and $5.4 million available to be drawn under the Firment Credit Facility, respectively.
As of December 31, 2016, 2015 and 2014 we were in compliance with the loan covenants of the Firment Credit Facility.



In connection with the February 2017 private
placement, on February 8, 2017 Firment released an amount equal to $16,885,000 (but left an amount equal to $1,638,787 outstanding,
which continued to accrue under the Firment Credit Facility as though it were principal) of the Firment Credit Facility and the
Company issued to Firment Shipping Inc., an affiliate of Firment, 16,885,000 common shares and a warrant to purchase 6,230,580
common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the closing of the private placement, Globus
repaid the outstanding amount on the Firment Credit Facility in its entirety.



Silaner Credit Facility



In January 2016, Globus Maritime Limited entered
into a credit facility for up to $3.0 million with Silaner Investments Limited, a related party to us, for the purpose of financing
our general working capital needs. The Silaner Credit Facility is unsecured and remains available until its final maturity date
at January 12, 2018, when Globus Maritime Limited must repay all drawn and outstanding amounts at that time. We have the right
to drawdown any amount up to $3.0 million or prepay any amount in multiples of $100,000. Any prepaid amount can be re-borrowed
in accordance with the terms of the facility. Interest on drawn and outstanding amounts is charged at 5% per annum and no commitment
fee is charged on the amounts remaining available and undrawn. As of December 31, 2016, the amount drawn and outstanding with respect
to the facility was $3.1 million, which amount has been approved by our board. As of December 31, 2016 we were in compliance with
the loan covenants of the Silaner Credit Facility.



In connection with the February 2017 private
placement, on February 8, 2017 Silaner released an amount equal to the outstanding principal of $3,115,000 (but left an amount
equal to $74,048 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal) of the Silaner
Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares and a warrant
to purchase 1,149,437 common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the closing of the private
placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety.



HSH Loan Agreement



In February 2015, through our wholly owned
subsidiaries, Devocean Maritime Ltd. Domina Maritime Ltd. and Dulac Maritime S.A., we entered into the HSH Loan Agreement for an
amount up to $30.0 million with HSH Nordbank AG and used funds borrowed thereunder with the purpose to part refinance our then
existing Credit Facility with Credit Suisse. On March 3, 2015, $29.4 million was drawn as follows:



$8.6 million was drawn (Tranche A) for the
purpose of prepaying the amount outstanding to our Credit Facility with Credit Suisse with respect to m/v River Globe. Tranche
A was originally payable in 19 quarterly installments of $239,115 starting in June 2015 and a balloon payment of $4.0 million payable
together with the 19th and last installment payable in December 2019. The balance outstanding of Tranche A at December
31, 2015 was $7,862,655 payable in 16 equal quarterly installments of $239,115 starting in March 2016, as well as a balloon payment
of $4,036,115 due together with the 16th and final installment due in December 2019.



$10.1 million was drawn (Tranche B) for the
purpose of prepaying the amount outstanding to our Credit Facility with Credit Suisse with respect to m/v Sky Globe. Tranche
B was originally payable in 19 quarterly installments of $230,000 starting in June 2015 and a balloon payment of $5.7 million payable
together with the 19th and last installment payable in December 2019. The balance outstanding of Tranche B at December
31, 2015 was $9,410,000 payable in 16 equal quarterly installments of $230,000 starting in March 2016, as well as a balloon payment
of $5,730,000 due together with the 16th and final installment due in December 2019.



$10.7 million was drawn (Tranche C) for the
purpose of prepaying the amount outstanding to our Credit Facility with Credit Suisse with respect to m/v Star Globe. Tranche
C was originally payable in 19 quarterly installments of $224,480 starting in June 2015 and a balloon payment of $6.5 million payable
together with the 19th and last installment payable in December 2019. The balance outstanding of Tranche C at December
31, 2015 was $10,051,560 payable in 16 equal quarterly installments of $224,480 starting in March 2016, as well as a balloon payment
of $6,459,880 due together with the 16th and final installment due in December 2019.



79







There is no amount remaining available
to be drawn under the HSH Loan Agreement.



Interest on outstanding loan balances
are payable at LIBOR plus 3.0% per annum for interest periods of three months and at LIBOR plus 3.1% for interest periods of one
month, where interest periods are at the option of the borrower.



Security



Our obligations under our HSH Loan Agreement
are secured by, among other things, a first preferred mortgage on three vessels (m/v River Globe, m/v Sky Globe
and m/v Star Globe). Our loan agreement is also secured by a first priority assignment of any time charter or other contract
of employment of any vessel that acts as security, a first priority account pledge over the operating account of the vessel-owning
company and an assignment of the vessel’s insurances and earnings. Each of the vessel-owning subsidiaries that owns a vessel
pledged as security under our loan agreement has agreed to the obligations under the facility. Globus Maritime Limited acts as
guarantor for this loan.



Subject to the below, the HSH Loan Agreement
contains various covenants requiring the vessels owning companies and Globus to, among others things, ensure that:



| | Ø | the
                                         aggregate fair market value of the mortgaged vessels and any additional security must
                                         equal or exceed 125% of the outstanding balance under the loan agreement,
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | the
                                         ratio of Globus’s total liabilities to its market adjusted total assets shall always
                                         be not higher than 0.75:1.00,
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Globus
                                         to maintain a minimum market adjusted net worth of more than or equal to $30.0 million,
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



| | Ø | the
                                         vessel owning subsidiaries must each maintain a minimum liquidity of $250,000 in an account
                                         pledged to the bank, and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Globus
                                         shall maintain a minimum liquidity of greater than 5% of its consolidated indebtedness.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2015, we were in breach
of all the above covenants except for the minimum liquidity requirement of $250,000 for each vessel owing subsidiary.



In March 2016, the Company repaid the
principal installment of $693,595.



During April 2016, Globus reached an agreement
in principle with HSH Nordbank AG and entered into a supplemental agreement on December 5, 2016 amending the HSH Loan Agreement
to relax and/or waive certain financial covenants for the period from June 3, 2016 to March 3, 2017, including: the required minimum
value of the mortgaged vessels was reduced to 60% of the balance of the loan; the maximum permitted ratio of Globus’s total
liabilities to its market adjusted total assets was increased to 2:1, the minimum liquidity requirement of Globus and the market
adjusted net worth requirements were waived, and the vessel owning subsidiaries must each maintain a minimum liquidity of $70,000.



The Company also agreed in April 2016,
to repay only one instead of three principal installments during 2016 using the pledged cash of $750,000 that has already deposited
in HSH accounts, the remaining two installments would be deferred to the last repayment installment. In addition, if there is
any excess amount over a TCE rate of $6,500, the excess will be used to reduce the deferred amounts. If the cash sweep that occurs
in 2017 does not result in the payment in full of the deferred amounts, then the remaining deferred amounts will be deferred to
the final balloon payment. In addition, HSH and Globus will look for potential buyers of the relevant ships in a mutual process
to ideally sell the vessels for an amount that allows for the full repayment of the HSH Loan Agreement. A $50,000 restructuring
fee will also be paid.



In March 2017, the Company reached an
agreement in principle with HSH Nordbank AG to amend the HSH Loan Agreement (which remain subject to definite documentation) including
amendments to relax or waive certain covenants of the original loan agreement until April 15, 2018. The Company will pay in September
2017 $1 million for repayment of debt and the four scheduled principal installments due within 2017, each amounting to $693,595,
will be deferred to the balloon payment. In addition, the Company has undertaken the liability to raise new equity of at least
$1,800,000.



As of December 31, 2016, we were in compliance
with the loan covenants of the HSH Loan Agreement, as amended and in effect.



80







All of the Company’s loan and credit
arrangements with unaffiliated third parties (this excludes the Silaner Credit Facility and the Firment Credit Facility, which
are both affiliates of our chairman Mr. George Feidakis) contain cross-default provisions that provide that if the Company is
in default under any of its loan or credit arrangements, the lender of another loan or credit arrangement can declare a default
under its other loan or credit arrangement, which could result in the Company’s default in all of its loan and credit arrangements
with unaffiliated third parties. Because of the presence of cross-default provisions in these loan and credit arrangements with
unaffiliated third parties, the refusal of any lender to grant or extend a relaxation or a waiver could result in most of its
indebtedness being accelerated, notwithstanding that other lenders have relaxed or waived covenant defaults under their respective
loan arrangements.



As of December 31, 2015, the Company was
in breach of most of the covenants included in its loan agreements with HSH Nordbank AG, Commerzbank AG and DVB Bank SE and therefore
the total amount outstanding for these loans was classified under current liabilities.



In March 2016, we reached a settlement
with Commerzbank AG, and in April 2016 the Company entered into a supplemental agreement with DVB Bank SE and an agreement in
principle and a supplemental agreement on December 5, 2016 with HSH Nordbank AG.



As of December 31, 2016, the Company was
in compliance with the loan covenants included in its loan agreements with HSH Nordbank AG and DVB Bank SE, as amended and in
effect.



Financial Instruments



The major trading currency of our business
is the U.S. dollar. Movements in the U.S. dollar relative to other currencies can potentially impact our operating and administrative
expenses and therefore our operating results.



In November 2008, in an effort to mitigate
the exposure to interest rate movements, we entered into two interest rate swap agreements for a notional amount of $25.0 million
in total. Both interest rate swap agreements reached maturity in November 2013.



We believe that we have a low risk approach
to treasury management. Cash balances are invested in term deposit accounts, with their maturity dates projected to coincide with
our liquidity requirements. Credit risk is diluted by placing cash on deposit with a variety of institutions in Europe, including
a small number of banks in Greece, which are selected based on their credit ratings. We have policies to limit the amount of credit
exposure to any particular financial institution.



As of December 31, 2016, 2015 and 2014,
we did not use any financial instruments designated in our consolidated financial statements as those with hedging purposes.



Capital Expenditures



We make capital expenditures from time
to time in connection with our vessel acquisitions or vessel improvements. We have no agreements to purchase any additional vessels,
but may do so in the future. We expect that any purchases of vessels will be paid for with cash from operations, with funds from
new credit facilities from banks with whom we currently transact business, with loans from banks with whom we do not have a banking
relationship but will provide us funds at terms acceptable to us, with funds from equity or debt issuances or any combination
thereof.



We incur additional capital expenditures
when our vessels undergo surveys. This process of recertification may require us to reposition these vessels from a discharge
port to shipyard facilities, which will reduce our operating days during the period. The loss of earnings associated with the
decrease in operating days, together with the capital needs for repairs and upgrades, is expected to result in increased cash
flow needs. We expect to fund these expenditures with cash on hand.



C.  Research
and Development, Patents and Licenses, etc.



We incur, from time to time, expenditures
relating to inspections for acquiring new vessels that meet our standards. Such expenditures are insignificant and they are expensed
as they incur.



D.  Trend
Information



Please read “Item 4.B.  Information
on the Company—Business Overview.”



81







E.  Off-Balance
Sheet Arrangements



We do not have any off-balance sheet arrangements.



F.  Tabular
Disclosure of Contractual Obligations



The following table sets forth our contractual
obligations and their maturity dates as of December 31, 2016:



|                           |  | Within One Year                |        |  | One to Three Years |  |        | Three to Five Years |  |  | More than Five years |  |  | Total |    
|-------------------------- |  | ------------------------------ | ------ |  | ------------------ |  | ------ | ------------------- |  |  | -------------------- |  |  | ----- | ---
|                           |  | (in thousands of U.S. Dollars) |       
|Long term debt             |  |                                | 23,634 |  |                    |  | 42,144 |                     |  |  | -                    |  |  |       | -  
|Interest on long term debt |  |                                | 1,600  |  |                    |  | 2,191  |                     |  |  | -                    |  |  |       | -  
|Lease payments             |  |                                | 131    |  |                    |  | 313    |                     |  |  | 209                  |  |  |       | 392



G.  Safe Harbor



See the section entitled “Cautionary
Note Regarding Forward-Looking Statements” at the beginning of this annual report on Form 20-F.



Item 6.  Directors, Senior
Management and Employees



A. Directors and Senior
Management



The following table sets forth information
regarding our executive officers and our directors. Our articles of incorporation provide for a board of directors serving staggered,
three-year terms, other than any members of our board of directors that may serve at the option of the holders of preferred shares,
if any are issued with relevant appointment powers. The term of our Class I directors expires at our annual general meeting of
shareholders in 2017, the term of our Class II directors expires at our annual general meeting of shareholders in 2018 and the
term of our Class III directors expires at our annual general meeting of shareholders in 2019. Officers are appointed from time
to time by our board of directors and hold office until a successor is appointed or their employment is terminated. The business
address of each of the directors and officers is c/o Globus Shipmanagement Corp., 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada,
Athens, Greece.



|Name                | Position                                                              | Age
|------------------- | --------------------------------------------------------------------- | ---
|Georgios Feidakis   | Chairman of the Board of Directors                                    | 66 
|Ioannis Kazantzidis | Director                                                              | 66 
|Jeffrey O. Parry    | Director                                                              | 57 
|Athanasios Feidakis | Director, President, Chief Executive Officer, Chief Financial Officer | 30 
|Olga Lambrianidou   | Secretary                                                             | 61 



Georgios (“George”) Feidakis,
a Class III director, is our co-founder and principal shareholder and has served as our non-executive chairman of the board of
directors since inception. Mr. George Feidakis is also the major shareholder and Chairman of F.G. Europe S.A., a company Mr. George
Feidakis has been involved with since 1994 and that has been listed on the Athens Stock Exchange since 1968, and acts as a director
and executive for several of its subsidiaries. FG Europe is active in four lines of business and distributes well-known brands
in Greece, the Balkans, Turkey and Italy. FG Europe is in the air-conditioning and white/brown electric goods market in Greece
and is active in power generation and mobile telephony. Mr. George Feidakis is also the director and chief executive officer of
R.F. Energy S.A., a company that plans, develops and controls the operation of energy projects, and acts as a director and executive
for several of its subsidiaries. As of January 31, 2017, Mr. Feidakis is the majority shareholder of Eolos Shipmanagement SA.



Athanasios (“Thanos”) Feidakis* a Class I Director was appointed to our board of directors in July 2013 to fill a vacancy in our board of directors.  As
of December 28, 2015, Mr. Athanasios Feidakis was also appointed our President, CEO and CFO. From October 2011 through June 2013,
Mr. Athanasios Feidakis worked for our operations and chartering department as an operator. Prior to that and from September 2010
to May 2011, Mr. Athanasios Feidakis worked for ACM, a shipbroking firm, as an S&P broker, and from October 2007 to April
2008, he worked for Clarksons, a shipbroking firm, as a chartering trainee on the dry cargo commodities chartering and on the
sale and purchase of vessels. From April 2011 to April 2016, Mr. Athanasios Feidakis was a director of F.G. Europe S.A., a company
controlled by his family, specializing in the distribution of well-known brands in Greece, the Balkans, Turkey and Italy. F.G.
Europe is also active in the air-conditioning and white/brown electric goods market and in power generation and mobile telephony
in Greece. From December 2008 to December 2015, Mr. Athanasios Feidakis was the President of Cyberonica S.A., a family owned company
specializing in real estate development. Mr. Athanasios Feidakis holds a B.Sc. in Business Studies and a M.Sc. in Shipping Trade
and Finance from the Cass Business School (City University London) and an MBA from London School of Economics. In addition, Mr.
Athanasios Feidakis has professional qualifications in dry cargo chartering and operations from the Institute of Chartered Shipbrokers.



82







Jeffrey O. Parry, a Class
II director, has served as our director since July 2010. Mr. Parry is currently the president of Mystic Marine Advisors LLC, a
Connecticut-based advisory firm specializing in turnaround and emerging shipping companies, and has been affiliated with such
company since August 1998. Mr. Parry is chairman of the board of directors of TBS Shipping Limited since April 2012 and
acted as its interim chief executive officer from October 2012 to December 2012.  Mr. Parry also serves a non-executive director
of Valhalla Shipping Inc. since January 2016 and served as its executive chairman from April 2014 to December 2015.  From
July 2008 to October 2009, he was president and chief executive officer of Nasdaq-listed Aries Maritime Transport Limited. Mr.
Parry has also served as the managing director of A.G. Pappadakis & Co. Ltd, an Athens-based shipowner from March 2007 to
July 2008, and managing director of Poten Capital Services LLC, a U.S. broker/dealer firm specializing in shipping from
February 2003 to March 2007. Mr. Parry holds a B.A. from Brown University and an MBA from Columbia University.



Ioannis Kazantzidis, a Class I
director, was appointed to our board in November, 2016 to fill a vacancy in our board of directors by the departure of Mr. Dimitrios
Stratikopoulos**. Mr. Kazantzidis has been the principal of Porto Trans Shipping LLC, a shipping and logistics company based in
the United Arab Emirates, since 2007. Between 1987 to 2007, Mr. Kazantzidis was with HSBC Group, where he served in managerial
positions participating in the development and implementation of financial systems in multiple locations. Mr. Kazantzidis has
since 2009 been a Director of Saeed Mohammed Heavy Equipment Trading LLC, a general trading company, and a senior partner in Porto
Trans Auto Services Company, both based in Jebel Ali, UAE. Mr. Kazantzidis has served as the Chairman of Nazaki Corporation, a
private investment company based in the British Virgin Islands, since 1988. Mr. Kazantzidis has served, since 2015, as the Chairman
of W.M.Mendis Hotel Pvt Ltd in the Republic of Sri Lanka. From 1989 to 2015, he was the Chairman of Fishermans Wharf Pvt Ltd,
and a director of Dow Corning Lanka Pvt Ltd from 2000 to 2013 and Propasax Pvt Ltd from 2010 to 2015.



Olga Lambrianidou, our secretary,
has been a corporate consultant to the Company since November 2010, and was appointed as secretary to the Company in December
2012. Prior to joining Globus, Ms. Lambrianidou was the Corporate Secretary and Investor Relations Officer of NewLead Holdings
Ltd., formerly known as Aries Maritime Limited from 2008 to 2010, and of DryShips Inc., a dry bulk publicly trading shipping company
from 2006 to 2008. Ms. Lambrianidou was Corporate Secretary, Investor Relations Officer and Human Resources Manager with OSG Ship
Management (GR) Ltd., formerly known as Stelmar Shipping Ltd. from 2000 to 2006. Prior to 2000, Ms. Lambrianidou worked in the
banking and insurance fields in the United States. She holds a BBA Degree in Marketing/English Literature from Pace University
and an MBA Degree in Banking/Finance from the Lubin School of Business of Pace University in New York.



Amir Eilon, was a Class III director
since inception and until our Annual General Meeting on September 8, 2016 at which time he decided not to seek another term. Mr.
Eilon was a director of Eilon & Associates Limited since February 1999, which provides general corporate advice. Mr. Eilon
was previously a non-executive chairman of Spring plc, listed on the London Stock Exchange, from mid-2004 to August 2009 and a
director of Flamingo Holdings, a venture capital backed private company, from March 2007 to April 2009. Mr. Eilon was the managing
director of Credit Suisse First Boston Private Equity from 1998 to 1999, the managing director of BZW from 1990 to 1998, where
he was head of global capital markets, and the managing director of Morgan Stanley, London from 1985 to 1990, where he was responsible
for international equity capital markets. Mr. Eilon was also the director of other companies involved in art software and debt-instrument
asset management companies.



*Athanasios Feidakis is the son of our
Chairman, George Feidakis. Other than the aforementioned, there are no other family relationships between any of our directors
or senior management. There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant
to which any person referred to above was selected as a director or member of senior management.



**Dimitrios Stratikopoulos, was appointed
to our board of directors as a Class I director on September 8, 2016. Mr. Stratikopoulos resigned from our board of directors
on November 23, 2016.



The Company is not aware of any agreements
or arrangements between any director and any person or entity other than the Company relating to the Compensation or other payments
in connection with such director’s candidacy or service as a director of the Company.



83







B.  Compensation



The aggregate compensation paid to members
of our senior management or a consulting company for which an executive officer is an owner in 2016, 2015 and 2014 was approximately
$0.1 million for each year. In addition, our senior management received no shares in 2016, 2015 and 2014. Information about dividends
paid to our shareholders, including to holders of Series A Preferred Shares, is contained in “Item 8.  Financial
Information - A. Consolidated Statements and Other Financial Information - Our Dividends Policy and Restrictions on Dividends.”



On August 18, 2016, the Company entered
into a consultancy agreement with an affiliated company of our CEO, Mr. Athanasios Feidakis, for the purpose of providing consulting
services to the Company in connection with the Company’s international shipping and capital raising activities, including
but not limited to assisting and advising the Company’s CEO. The annual fees for the services provided amount to Euro 200,000.
The consultant shall be eligible to receive bonus compensation (whether in the form of cash and/or equity and/or quasi-equity
awards) for the services provided and such bonus shall be determined by the Remuneration Committee or the Board of the Company.
In 2016 his total remuneration amounted to approximately $97,000.



The aggregate compensation other than
share based compensation paid to our non-executive directors in 2016 and 2015 was nil and for 2014 was approximately $68,000,
plus reimbursements for actual expenses incurred while acting in their capacity as a director. In addition, in 2016, 2015 and
2014, non-executive directors received an aggregate of 34,580 common shares, 18,372 common shares and 4,577 common shares, respectively.
As of December 31, 2016 we had not yet paid our non-executive directors the cash amounts that we agreed to pay them for their
service to us in 2016; such amount in the aggregate is approximately $139,000. We also owe our non-executive directors $145,000
and $48,750 for their service to us in 2015 and 2014, respectively. In 2017 to date, we have paid $30,000 of these outstanding
amounts. We redeemed and cancelled 2,567 Series A Preferred Shares in July 2016, which shares were held by our former CEO. We
paid an aggregate amount to our former CEO of $242,000 for these shares and other consideration.



Our Greek employees are bound by Greek
labor law, which provides certain payments to these employees upon their dismissal or retirement. We accrued as of December 31,
2016 a non-current liability of $77,664 for such payments.



We do not have a retirement plan for our
officers or directors.



C.  Board
Practices



Our board of directors and executive officers
oversee and supervise our operations.



Each director holds office until his successor
is elected or appointed, unless his office is earlier vacated in accordance with the articles of incorporation or with the provisions
of the BCA. In addition to cash compensation, we pay each of Mr. Kazantzidis and Mr. Parry $20,000 in common shares annually.
The members of our senior management are appointed to serve at the discretion of our board of directors. Our board of directors
and committees of our board of directors schedule regular meetings over the course of the year. Under the Nasdaq rules, we believe
that Mr. Ioannis Kazantzidis and Mr. Parry are independent.



On December 28, 2015, Mr. Thanos Feidakis
resigned from the board of directors as a Class II director and was immediately reappointed by the board of directors as a Class
I director whose term will expire at the Company’s 2017 annual meeting of shareholders. This was accomplished solely in
order to provide for an equal apportionment of the members of the board of directors of Globus Maritime Limited, among the three
classes of its classified board of directors.



We have an Audit Committee, a Remuneration
Committee and a Nomination Committee.



The Audit Committee is comprised of Ioannis
Kazantzidis and Jeffrey O. Parry. It is responsible for ensuring that our financial performance is properly reported on and monitored,
for reviewing internal control systems and the auditors’ reports relating to our accounts and for reviewing and approving
all related party transactions. Our board of directors has determined that Ioannis Kazantzidis is our audit committee financial
expert. Each Audit Committee member has experience in reading and understanding financial statements, including statements of
financial position, statements of comprehensive income and statements of cash flows.



84







The Remuneration Committee is comprised
of Jeffrey O. Parry, Athanasios Feidakis, and Ioannis Kazantzidis. It is responsible for determining, subject to approval from
our board of directors, the remuneration guidelines to apply to our executive officers, secretary and other members of the executive
management as our board of directors designates the Remuneration Committee to consider. It is also responsible for suggesting
the total individual remuneration packages of each director including, where appropriate, bonuses, incentive payments and share
options. The Remuneration Committee is responsible for declaring dividends on our Series A Preferred Shares, if any. The Remuneration
Committee will also liaise with the Nomination Committee to ensure that the remuneration of newly appointed executives falls within
our overall remuneration policies. While Athanasios Feidakis is not an independent director, we believe that, as our Chief Executive
Officer, he has a substantial vested interest in our success, his particular input will significantly aid and assist us.



The Nomination Committee is comprised
of George Feidakis, Ioannis Kazantzidis and Jeffrey O. Parry. It is responsible for reviewing the structure, size and composition
of our board of directors and identifying and nominating candidates to fill board positions as necessary.



For information about the term of each
director, see “Item 6. Directors, Senior Management and Employees - A. Directors and Senior Management”.



D.  Employees



As of December 31, 2016, we had ten full-time
employees and three consultants, all of whom were hired through our Manager, except for one consultant that we hired directly.
All of our employees are located in Greece and are engaged in the service and management of our fleet. None of our employees are
covered by collective bargaining agreements, although certain crew members are parties to collective bargaining agreements. We
do not employ a significant number of temporary employees.



E.  Share
Ownership



With respect to the total number of common
shares owned by all of our officers and directors, individually and as a group, please read “Item 7. Major Shareholders
and Related Party Transactions.”



Incentives program



We maintain an equity incentive program,
because we believe that equity awards are important to align our employees’ interests with those of our shareholders. Our
equity incentive program is administered by our Remuneration Committee or, in certain circumstances, our board of directors. The
Remuneration Committee generally measures our performance in terms of total shareholder return, which is calculated based on changes
in our share price and our dividends paid over a calendar year, which we refer to as TSR.



Our board of directors believe that these
awards keep our employees focused on our growth, as well as dividend growth and its impact on our share price, over an extended
time period.



The 2012 Equity Incentive Plan of Globus
Maritime Limited, or the “EIP,” provides for the award of stock options, stock appreciation rights, restricted stock,
restricted stock units and unrestricted stock, for directors, officers and employees (including any prospective officer or employee)
of our Company and our subsidiaries and affiliates and consultants and service providers (including individuals who are employed
by or provide services to any entity that is itself such a consultant or service provider) to our Company and our subsidiaries
and affiliates, with the goal of providing such persons the incentive to enter into and remain in the service of the Company or
its affiliates, acquire a proprietary interest in the success of the Company, maximize their performance and enhance
the long-term performance of the Company. The EIP was amended August 12, 2016 to clarify that the full board of directors may
act as plan administrator.



Administration. The EIP
is administered by the Remuneration Committee of our board of directors, or such other committee of the board of directors designated
by the board of directors (which could be the full board of directors itself). We refer to the body administering the EIP as the
“Administrator.” The EIP allows the Administrator to delegate its rights to the extent consistent with applicable
law and our organizational documents. The Administrator has the authority to, among other things, designate the persons to receive
awards under the EIP; determine the types of awards granted to a participant under the EIP; determine the number of shares to
be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, awards; determine
the terms and conditions of any awards; determine whether, and to what extent, and under what circumstances, awards may be settled
or exercised in cash, shares, other securities, other awards or other property, or cancelled, forfeited or suspended, and the
methods by which awards may be settled, exercised, cancelled, forfeited or suspended; determine whether, to what extent, and under
what circumstances cash, shares, other securities, other awards, other property and other amounts payable with respect to an award
shall be deferred, either automatically or at the election of the holder thereof or the Administrator; construe, interpret and
implement the EIP and any Award Agreement; prescribe, amend, rescind or waive rules and regulations relating to the EIP, including
rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the EIP;
make all determinations necessary or advisable in administering the EIP; correct any defect, supply any omission and reconcile
any inconsistency in the EIP or any Award Agreement; and make any other determination and take any other action that the Administrator
deems necessary or desirable for the administration of the EIP. The board of directors has the right to alter or amend the EIP.



85







Number of Shares. Subject
to adjustment in the event of any distribution, recapitalization, split, merger, consolidation or similar corporate event, 1,000,000
of our common shares are available for delivery pursuant to awards granted under the EIP. Awards may not be paid in cash. Shares
subject to an award under the EIP that are cancelled, forfeited, exchanged, settled in cash or otherwise terminated, including
withheld to satisfy exercise prices or tax withholding obligations, are available for delivery pursuant to other awards. Shares
issued pursuant to the EIP may be authorized but unissued common shares or treasury shares.



Award Agreements. Each award
granted under the EIP shall be evidenced by a written certificate, which we refer to as an Award Agreement, which shall contain
such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment
by a grantee. Each Award shall be subject to all of the terms and provisions of the EIP and the applicable Award Agreement.



Stock Options. A stock option
is a right to purchase shares at a specified price during a specified time period. The EIP permits the grant of options covering
our common shares. The Administrator may make grants under the EIP to participants containing such terms as the Administrator
shall determine. No option shall be treated as an “incentive stock option” for purposes of the Code. Stock options
granted will become exercisable over a period determined by the Administrator. Each Award Agreement with respect to an option
shall set forth the exercise price of such Award and, unless otherwise specifically provided in the Award Agreement, the exercise
price of an option shall equal the fair market value of a common share on the date of grant; provided that in no event may such
exercise price be less than the greater of the fair market value of a common share on the date of grant and the par value of a
common share.



Restricted Shares. A restricted
share grant is an award of common shares that vests over a period of time and is subject to forfeiture until it has vested. The
Administrator may determine to make grants of restricted shares under the EIP to participants containing such terms as the Administrator
shall determine. The Administrator will determine the period over which restricted shares granted to participants will vest and
the voting provisions. The Administrator, in its discretion, may base its determination upon the achievement of specified financial
objectives.



Stock Appreciation Rights.
A stock appreciation right is the right, subject to the terms of the EIP and the applicable Award Agreement, to receive from the
Company an amount equal to (i) the excess of the fair market value of a common share on the date of exercise of the stock appreciation
right over the exercise price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the
stock appreciation right is exercised. Each Award Agreement with respect to a stock appreciation right shall set forth the exercise
price of such Award and, unless otherwise specifically provided in the Award Agreement, the exercise price of a stock appreciation
right shall equal the fair market value of a common share on the date of grant; provided that in no event may such exercise price
be less than the greater of (A) the fair market value of a common share on the date of grant and (B) the par value of a common
share. Payment upon exercise of a stock appreciation right shall be in cash or in common shares (valued at their fair market value
on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.
Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option
shall be reduced by the number of shares with respect to which the stock appreciation right is exercised. Upon the exercise of
an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation
right shall be reduced by the number of shares with respect to which the option is exercised.



Restricted Stock Unit. A
restricted stock unit is a notional share that entitles the grantee to receive a common share upon the vesting of the restricted
stock unit or, in the discretion of the Administrator, cash equivalent to the value of a common share. The Administrator may determine
to make grants of restricted stock units under the EIP to participants containing such terms as the Administrator shall determine.
The Administrator will determine the period over which restricted stock units granted to participants will vest.



86







Unrestricted Stock. The
Administrator may grant (or sell at a purchase price at least equal to par value) common shares free of restrictions under the
EIP to available participants and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.
Common shares may be thus granted or sold in respect of past services or other valid consideration.



Tax Withholding. At our
discretion, and subject to conditions that the Administrator may impose, a participant may elect that his minimum statutory tax
withholding with respect to an award may be satisfied by withholding from any payment related to an award or by the withholding
of shares issuable pursuant to the award based on the fair market value of the shares.



Award Adjustments. If the
Administrator determines that any dividend or other distribution (whether in the form of cash, Company shares, other securities
or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights
to purchase Company shares or other securities of the Company, or other similar corporate transaction or event affects the Company
shares such that an adjustment is determined by the Administrator to be appropriate or desirable, then the Administrator shall,
in such manner as it may deem equitable or desirable, adjust any or all of the number of shares or other securities of the Company
(or number and kind of other securities or property) with respect to which Awards may be granted under the EIP. The Administrator
is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events (including the events described above in the first sentence of this paragraph, the occurrence of a Change
in Control (as defined in the EIP) affecting the Company, any affiliate, or the financial statements of the Company or any affiliate,
or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange,
accounting principles or law, whenever the Administrator determines that such adjustments are appropriate or desirable, including
providing for adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities
or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the exercise price with respect
to any Award and a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions
on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of
such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration
for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per
share exercise price equal to, or in excess of, the fair market value of a share subject to such option or stock appreciation
right may be cancelled and terminated without any payment or consideration therefor).



Change in Control. Upon
a “change of control” (as defined in the EIP), and unless the Administrator decides otherwise:



| | · | Any
                                         Award then outstanding shall become fully vested and any restriction and forfeiture provisions
                                         thereon imposed pursuant to the EIP and the Award Agreement shall lapse and any Award
                                         in the form of an option or stock appreciation right shall be immediately exercisable.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | To
                                         the extent permitted by law and not otherwise limited by the terms of the EIP, the Administrator
                                         may amend any Award Agreement in such manner as it deems appropriate.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | An
                                         award recipient who is terminated or dismissed from their position for any reason other
                                         than “for cause” within one year of the change in control may, for a limited
                                         time, exercise any outstanding option or stock appreciation right, but only to the extent
                                         that the grantee was entitled to exercise the Award on the date of his or her termination
                                         of employment or consultancy/service relationship or dismissal from the board of directors.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Termination of Employment or Service.
The consequences of the termination of a grantee’s employment, consulting arrangement, or membership on the board of directors
will be determined by the Administrator in the terms of the relevant Award Agreement. Generally, the Administrator may modify
these consequences. The Administrator can impose any forfeiture or vesting provisions in any Award Agreement.



2016, 2015, 2014
Grants



No awards were granted pursuant to the
equity incentive plan during the years ended December 31, 2016, 2015 and 2014, but we issued shares directly to the directors,
which was not part of the equity incentive program.



87







Item 7.  Major Shareholders
and Related Party Transactions



A.  Major
Shareholders



The following table sets forth information
concerning ownership of our common shares as of April 11, 2017 by persons who beneficially own more than 5.0% of our outstanding
common shares, each person who is a director of our company, each executive officer named in this annual report on Form 20-F and
all directors and executive officers as a group.



Beneficial ownership of shares is determined
under rules of the Securities and Exchange Commission (the “SEC”) and generally includes any shares over which a person
exercises sole or shared voting or investment power. Except as indicated in the footnotes to this table and subject to community
property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares
shown as beneficially owned by them.



The numbers of shares and percentages
of beneficial ownership are based on 27,628,789 common shares outstanding on April 11, 2017. All common shares owned by the shareholders
listed in the table below have the same voting rights as the other of our outstanding common shares.



The address for those individuals for
which an address is not otherwise indicated is: c/o Globus Shipmanagement Corp., 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada,
Athens, Greece.





|Name and address of beneficial owner            |  | Number of common shares beneficially
    owned as of April 11, 2017 |            |  | Percentage of common shares beneficially
    owned as of April 11, 2017 (1) | 
|----------------------------------------------- |  | ------------------------------------------------------------------- | ---------- |  | --------------------------------------------------------------------------- | 
|5% Beneficial Owners                            |  |                                                                     |            |  |                                                                             | 
|Konstantina Feidaki(2)                          |  |                                                                     | 6,750,000  |  |                                                                             | 
|Officers and Directors                          |  |                                                                     |            |  |                                                                             | 
|George Feidakis (3)                             |  |                                                                     | 28,521,534 |  |                                                                             | 
|Ioannis Kazantzidis                             |  |                                                                     | 332        |  |                                                                             | 
|Jeffrey O. Parry                                |  |                                                                     | 3,516      |  |                                                                             | 
|Athanasios Feidakis                             |  |                                                                     | 118,864    |  |                                                                             | 
|All executive officers and directors as a group |  |                                                                     | 28,644,246 |  |                                                                             | 



*Less than 1.0% of the outstanding
shares.



(1) In the case of
Ms. Konstantina Feidaki and Mr. George Feidakis, these percentages assume the full exercise of the warrants they are each beneficially
deemed to own and no exercise of warrants held by any other warrant holder. Robelle Holding Co.’s warrant (which Ms. Konstantina
Feidaki beneficially owns) contains a blocker provision which prohibits its exercise to the extent such exercise would cause Robelle
Holding Co., together with its affiliates and attribution parties, to beneficially own a number of common shares which would exceed
4.99% (which may be increased, but not to exceed 9.99%) of our then outstanding common shares following such exercise, excluding
for purposes of such determination common shares issuable upon exercise of the warrants which have not been exercised. In making
the calculations above, we have assumed that this “Blocker Provision” did not exist.



(2) Ms. Konstantina
Feidaki beneficially owns (a) 1,750,000 common shares through Robelle Holding Co., a Marshall Islands corporation over which she
exercises sole voting and investment power, and (b) 5,000,000 common shares issuable upon the exercise of warrants held by Robelle
Holding Co. Robelle Holding Co. acquired these securities in the February 2017 transactions. To the Company’s knowledge,
neither Robelle nor Ms. Konstantina Feidaki owned any shares in the three years prior to the February 2017.



(3) Mr. George Feidakis beneficially
owns (a) 20,000,000 common shares through Firment Shipping Inc., a Marshall Islands corporation for which he exercises sole voting
and investment power, (b) 7,380,017 common shares issuable upon the exercise of warrants held by Firment Shipping Inc., and (c)
1,141,517 of his common shares through Firment Trading Limited, a Marshall Islands corporation, for which he exercises sole voting
and investment power through two companies that hold Firment Trading’s shares in trust for Mr. George Feidakis. Mr. George
Feidakis, Firment Shipping Inc., and Firment Trading Limited disclaim beneficial ownership over such common shares except to the
extent of their pecuniary interests in such shares.



88







When we filed our annual report for
the years ended 2015 and 2016, Mr. George Feidakis beneficially owned 50.7% and 50.1% of our common shares, respectively. In 2016,
FG Europe S.A., a company Mr. George Feidakis controls, sold 120,000 common shares. As part of the February 2017 private placement,
Firment Shipping Inc. acquired 20 million shares and warrants to purchase 7,380,017 common shares. In December 2016 Firment Trading
Limited sold 39,601 common shares.



(4) Includes common shares acquirable
within 60 days upon exercise of warrants owned by Firment Trading Inc.



To the best of our knowledge, except as
disclosed in the table above, we are not owned or controlled, directly or indirectly, by another corporation or by any foreign
government. To the best of our knowledge, there are no agreements in place that could result in a change of control of us, other
than the warrants described above.



In the normal course of business, there
have been institutional investors that buy and sell our shares. It is possible that significant changes in the percentage ownership
of these investors will occur.



B.  Related
Party Transactions



Lease



During the 2016, 2015 and 2014 fiscal
years, we incurred rents of $138,000, $195,000 and $234,000, respectively, to Cyberonica S.A., a company owned by Mr. George Feidakis,
for the rental of 350 square meters of office space for our operations. As of December 31, 2016, we owed $313,000 in back rent
to Cyberonica S.A.



Employment of Relative of Mr. George
Feidakis



In October 2011, we entered into an employment
agreement with Mr. Athanasios Feidakis, the son of our chairman of the board of directors and largest beneficial shareholder,
Mr. George Feidakis, to act in a non-managerial position. As of July 1, 2013, Mr. Athanasios Feidakis became a non-executive director
of the Company and such employment agreement was terminated. Mr. George Karageorgiou resigned from the position of President,
Chief Executive and Interim Chief Financial Officer and Director of Globus Maritime Limited on December 28, 2015, and Mr. Athanasios
Feidakis was appointed as President, Chief Executive Officer and Chief Financial Officer as of the same day.



Firment Credit Facility



In December 2013, Globus Maritime Limited
entered into a credit facility for up to $4.0 million with Firment Trading Limited, a related party to us, for the purpose of
financing our general working capital needs. The Firment Credit Facility is unsecured and remains available until its final maturity
date, originally at December 12, 2015, when Globus Maritime Limited must repay all drawn and outstanding amounts at that time.
During December 2014 the credit limit of the facility increased from $4.0 to $8.0 million and its final maturity date was extended
to April 29, 2016. During December 2015 the credit limit of the facility increased from $8.0 to $20.0 million and its final maturity
date was extended to April 12, 2017. In December 2015, the Firment Credit Facility was assigned from Firment Trading Limited,
a Cypriot company, to Firment Trading Limited, a Marshall Islands corporation, each of which is a related party to us. We have
the right to drawdown any amount up to $20.0 million or prepay any amount, during the availability period in multiples of $100,000.
Any prepaid amount can be re-borrowed in accordance with the terms of the facility. Interest on drawn and outstanding amounts
is charged at 5% per annum and no commitment fee is charged on the amounts remaining available and undrawn.



As of December 31, 2016, 2015 and 2014,
the amounts drawn and outstanding with respect to the facility were $17.4, $14.6 and $7.5 million, respectively. As of December
31, 2016, there was an amount of $2.6 million available to be drawn under the Firment Credit Facility. In connection with the
February 2017 private placement, the Company and Firment Trading Limited agreed to release an amount equal to $16,885,000 (but
to have an amount equal to $1,638,787 remain outstanding, and to continue to accrue under the Firment Trading Credit Facility
as though it were principal) of the Firment Credit Facility and Globus agreed to issue 16,885,000 common shares and a warrant
to purchase 6,230,580 common shares of the Issuer at a price of $1.60 per share (subject to adjustment). Subsequent to the February
2017 private placement, the Firment Credit Facility was fully repaid. The Firment Credit Facility remains available to the Company
until April 12, 2017.



89









Silaner Credit Facility



In
January 2016, Globus Maritime Limited entered into a credit facility for up to $3.0 million with Silaner Investments Limited,
a related party to us, for the purpose of financing our general working capital needs. The Silaner Credit Facility is unsecured
and remains available until its final maturity date at January 12, 2018, when Globus Maritime Limited must repay all drawn and
outstanding amounts at that time. We have the right to drawdown any amount up to $3.0 million or prepay any amount in multiples
of $100,000. Any prepaid amount can be re-borrowed in accordance with the terms of the facility. Interest on drawn and outstanding
amounts is charged at 5% per annum and no commitment fee is charged on the amounts remaining available and undrawn. As of December
31, 2016, $3.1 million is outstanding with respect to this facility. In connection with the February 2017 private placement, Silaner
Investments Limited agreed to release an amount equal to the outstanding principal of $3,115,000 (but to have an amount equal
to the accrued and unpaid interest of $74,048 remain outstanding, and to continue to accrue under the Silaner Credit Facility
as though it were principal) of the Silaner Credit Facility and Globus agreed to issue 3,115,000 common shares and a warrant to
purchase 1,149,437 common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the February 2017 private
placement, the Silaner Credit Facility was fully repaid. The Silaner Credit Facility remains available to the Company until January
12, 2018.



Business Opportunities Agreement



In November 2010, Mr. George Feidakis
entered into a business opportunities arrangement with us. Under this agreement, Mr. George Feidakis is required to disclose to
us any business opportunities relating to dry bulk shipping that may arise during his service to us as a member of our board of
directors that could reasonably be expected to be a business opportunity that we may pursue. Mr. George Feidakis agreed to disclose
all such opportunities, and the material facts attendant thereto, to our board of directors for our consideration and if our board
of directors fails to adopt a resolution regarding an opportunity within seven business days of disclosure, we will be deemed
to have declined to pursue the opportunity, in which event Mr. George Feidakis will be free to pursue it. Mr. George Feidakis
is also prohibited for six months after the termination of the agreement to solicit any of our or our subsidiaries’ senior
employees or officers. Mr. George Feidakis’ obligations under the business opportunities agreement will also terminate when
he no longer beneficially owns our shares representing at least 30% of the combined voting power of all our outstanding shares
or any other equity, or no longer serves as our director. Mr. George Feidakis remains free to conduct his other businesses that
are not related to dry bulk shipping.



Registration Rights Agreement



In November 2016, we entered into a registration
rights agreement with Firment Trading Limited., pursuant to which we granted to them and their affiliates (including Mr. George
Feidakis and certain of their transferees, the right, under certain circumstances and subject to certain restrictions to require
us to register under the Securities Act our common shares held by them. Under the registration rights agreement, these persons
have the right to request us to register the sale of shares held by them on their behalf and may require us to make available
shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition,
these persons have the ability to exercise certain piggyback registration rights in connection with registered offerings requested
by shareholders or initiated by us.



Consulting Agreements



On August 18, 2016, the Company entered
into a consultancy agreement with an affiliated company of our CEO, Mr. Athanasios Feidakis, for the purpose of providing consulting
services to the Company in connection with the Company’s international shipping and capital raising activities, including
but not limited to assisting and advising the Company’s CEO.



In June 2016, our Manager, entered into
a consultancy agreement with Eolos Shipmanagement S.A., a related party, for the purpose of providing consultancy services to
Eolos Shipmanagement S.A. For these services our Manager receives a daily fee of $1,000. For 2016 the total income from these
fees amounted to $187,000 and is classified in the income statement component of the consolidated statement of comprehensive loss
under management & consulting fee income.



C.  Interests
of Experts and Counsel



Not Applicable.



Item 8.  Financial Information



A. Consolidated Statements
and Other Financial Information



See Item 18.



90







Legal Proceedings



We have not been involved in any legal
proceedings which may have, or have had, a significant effect on our business, financial position, results of operations or liquidity,
nor are we aware of any other proceedings that are pending or threatened which may have a significant effect on our business,
financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in
the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be
covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of
significant financial and managerial resources.



Our Dividend Policy and Restrictions
on Dividends



Our dividend policy is to pay to holders
of our shares a variable quarterly dividend in excess of 50% of the net income of the previous quarter subject to any reserves
our board of directors may from time to time determine are required. We believe this policy maintains an appropriate level of
dividend cover taking into account the likely effects of the shipping cycle and the need to retain cash to reinvest in vessel
acquisitions.



In calculating our dividend to holders
of our shares, we exclude any gain on the sale of vessels and any unrealized gains or losses on derivatives. Our board of directors,
in its discretion, can determine in the future whether any capital surpluses arising from vessel sales are included in the calculation
of a dividend. Dividends will be paid in U.S. dollars equally on a per-share basis between our common shares and our Class B shares,
to the extent any are issued and outstanding.



Our Remuneration Committee will also determine
by unanimous resolution, in its sole discretion, when and to the extent dividends are paid to the holders of our Series A Preferred
Shares, to the extent any are outstanding.



We are a holding company, with no material
assets other than the shares of our subsidiaries. Therefore, our ability to pay dividends depends on the earnings and cash flow
of those subsidiaries and their ability to pay dividends to us. Additionally, the declaration and payment of any dividend is subject
at all times to the discretion of our board of directors and will depend on, among other things, our earnings, financial condition
and anticipated cash requirements and availability, additional acquisitions of vessels, restrictions in our debt arrangements,
the provisions of Marshall Islands law affecting the payment of dividends to shareholders, required capital and drydocking expenditures,
reserves established by our board of directors, increased or unanticipated expenses, a change in our dividend policy, additional
borrowings and future issuances of securities, many of which are beyond our control.



Marshall Islands law generally prohibits
the payment of dividends other than from surplus (retained earnings and the excess of consideration received from the sale of
shares above the par value of the shares) or while a corporation is insolvent or would be rendered insolvent by the payment of
such dividend.



We historically paid dividends to our
common shareholders in amounts ranging from $0.03 per share to $0.50 per share. Historical dividend payments should not provide
any promise or indication of future dividend payments.

No dividends were declared
or paid on our common shares during the years ended December 31, 2016, 2015 and 2014.



No dividends were declared
on our Series A Preferred Shares during the year ended December 31, 2016. The Series A Preferred Shares were redeemed in 2016
and no Series A Preferred Shares are outstanding as of December 31, 2016.



Dividends declared and
paid on our Series A Preferred Shares during the year ended December 31, 2015 are as follows:



|2015                   |  | $ per share |       |  | $000’s |  |     | Date declared |  | Date Paid        
|---------------------- |  | ----------- | ----- |  | ------ |  | --- | ------------- |  | -----------------
|1st Preferred dividend |  |             | 77.26 |  |        |  | 198 |               |  | February 18, 2015
|2nd Preferred dividend |  |             | 97.39 |  |        |  | 250 |               |  | December 21, 2015
|                       |  |             |       |  |        |  | 448 |               |  |                  



* Settled with several
payments, which final payment was made in January 2016.



Dividends declared and
paid on our Series A Preferred shares during the year ended December 31, 2014 are as follows:



91







|2014                   |  | $ per share |       |  | $000’s |  |     | Date declared |  | Date Paid        
|---------------------- |  | ----------- | ----- |  | ------ |  | --- | ------------- |  | -----------------
|1st Preferred dividend |  |             | 86.54 |  |        |  | 223 |               |  | May 9, 2014      
|2nd Preferred dividend |  |             | 27.34 |  |        |  | 70  |               |  | December 30, 2014
|                       |  |             |       |  |        |  | 293 |               |  |                  



Our loan agreements impose certain restrictions
to us with respect to dividend payments to our common shareholders and on the holders of Series A Preferred shares. Please see
“Item 5.B. Liquidity and Capital Resources—Indebtedness.”



B.  Significant
Changes



On February 8, 2017,
we entered into a Share and Warrant Purchase Agreement pursuant to which we sold for $5 million an aggregate of 5 million of our
common shares, par value $0.004 per share and warrants to purchase 25 million of our common shares at a price of $1.60 per share
(subject to adjustment) to a number of investors in a private placement. These securities were issued in transactions exempt from
registration under the Securities Act. The following day, we entered into a registration rights agreement with the Purchasers
providing them with certain rights relating to registration under the Securities Act of the Shares and the common shares underlying
the Warrants.



In connection with the
closing of the February 2017 private placement, we also entered into two loan amendment agreements with existing lenders.



One loan amendment agreement
was entered into by the Company with Firment Trading Limited, a related party to the Company and the lender of the Firment Credit
Facility, which then had an outstanding principal amount of $18,523,787. Firment released an amount equal to $16,885,000 (but
left an amount equal to $1,638,787 outstanding, which continued to accrue under the Firment Credit Facility as though it were
principal) of the Firment Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Firment, 16,885,000
common shares and a warrant to purchase 6,230,580 common shares at a price of $1.60 per share (subject to adjustment). Subsequent
to the closing of the February 2017 private placement, Globus repaid the outstanding amount on the Firment Credit Facility in
its entirety.



The other loan amendment
agreement was entered into by the Company with Silaner Investments Limited, a related party to the Company and the lender of the
Silaner Credit Facility. Silaner released an amount equal to the outstanding principal of $3,115,000 (but left an amount equal
to $74,048 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal) of the Silaner
Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares and a warrant
to purchase 1,149,437 common shares at a price of $1.60 per share (subject to adjustment). Subsequent to the closing of the February
2017 private placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety.



Each of the above mentioned
warrants are exercisable for 24 months after their respective issuance. Under the terms of the warrants, all warrant holders (other
than Firment Shipping Inc., which has no such restriction in its warrants) may not exercise their warrants to the extent such
exercise would cause such warrant holder, together with its affiliates and attribution parties, to beneficially own a number of
common shares which would exceed 4.99% (which may be increased, but not to exceed 9.99%) of our then outstanding common shares
immediately following such exercise, excluding for purposes of such determination common shares issuable upon exercise of the
warrants which have not been exercised. This provision does not limit a warrant holder from acquiring up to 4.99% of our common
shares, selling all of their common shares, and re-acquiring up to 4.99% of our common shares.



Item 9.  The Offer and Listing



Our common shares began trading in the
United Kingdom on the London Stock Exchange through the AIM on June 6, 2007 under the stock symbol “GLBS.L.” All such
trades were conducted with pounds sterling. Our common shares were suspended from trading on the AIM as of November 24, 2010 and
were delisted from the AIM on November 26, 2010.



On November 24, 2010, we redomiciled into
the Marshall Islands pursuant to the BCA and a resale registration statement for our common shares was declared effective by the
SEC. Once the resale registration statement was declared effective by the SEC, our common shares began trading on the Nasdaq Global
Market under the ticker “GLBS.”



92







On April 11, 2016 our common shares began
trading on the Nasdaq Capital Market and ceased trading on the Nasdaq Global Market, without a change in our ticker.





On October 20, 2016,
we effected a four-for-one one reverse stock split which reduced the number of our outstanding common shares from 10,510,741 to
2,627,674 shares (adjustments were made based on fractional shares).



The following table lists the high and
low sales prices on the Nasdaq Global Market and Nasdaq Capital Market, as applicable, for our common shares for the last six
months; the last eight fiscal quarters; and the last five fiscal years.



Prices indicated below with respect to
our common share price include inter-dealer prices, without retail mark up, mark down or commission and may not necessarily represent
actual transactions. All prices are quoted in U.S. dollars. Pre-October 2016 prices reflect the reverse stock split that occurred
in October, 2016.



|Period Ended                                     |  | High |       |  | Low |  
|------------------------------------------------ |  | ---- | ----- |  | --- | -
|                                                 |  |      |       |  |     |  
|Monthly                                          |  |      |       |  |     |  
|April 2017(through and including April 10, 2017) |  | $    | 4.96  |  |     | $
|March 2017                                       |  | $    | 6.74  |  |     | $
|February 2017                                    |  | $    | 9.70  |  |     | $
|January 2017                                     |  | $    | 10.77 |  |     | $
|December 2016                                    |  | $    | 7.67  |  |     | $
|November 2016                                    |  | $    | 14.23 |  |     | $
|October 2016                                     |  | $    | 2.84  |  |     | $
|                                                 |  |      |       |  |     |  
|Quarterly                                        |  |      |       |  |     |  
|First Quarter 2017                               |  | $    | 10.77 |  |     | $
|Fourth Quarter 2016                              |  | $    | 14.23 |  |     | $
|Third Quarter 2016                               |  | $    | 3.28  |  |     | $
|Second Quarter 2016                              |  | $    | 5.16  |  |     | $
|First Quarter 2016                               |  | $    | 0.88  |  |     | $
|Fourth Quarter 2015                              |  | $    | 3.96  |  |     | $
|Third Quarter 2015                               |  | $    | 6.32  |  |     | $
|Second Quarter 2015                              |  | $    | 7.60  |  |     | $
|First Quarter 2015                               |  | $    | 10.16 |  |     | $
|                                                 |  |      |       |  |     |  
|Yearly                                           |  |      |       |  |     |  
|2016                                             |  | $    | 7.09  |  |     | $
|2015                                             |  | $    | 10.16 |  |     | $
|2014                                             |  | $    | 17.76 |  |     | $
|2013                                             |  | $    | 16.84 |  |     | $
|2012                                             |  | $    | 23.08 |  |     | $



Item 10.  Additional Information



A. Share Capital



Not Applicable.



B. Memorandum and Articles
of Association



Purpose



Our objects and purposes, as provided
in Section 1.3 of our articles of incorporation, are to engage in any lawful act or activity for which corporations may now or
hereafter be organized under the BCA.



93







Common Shares and Class B Shares



Generally, Marshall Islands law provides
that the holders of a class of stock of a Marshall Islands corporation are entitled to a separate class vote on any proposed amendment
to the relevant articles of incorporation that would change the aggregate number of authorized shares or the par value of that
class of shares or alter or change the powers, preferences or special rights of that class so as to affect them adversely. Except
as described below, holders of our common shares and Class B shares will have equivalent economic rights, but holders of our common
shares will be entitled to one vote per share and holders of our Class B shares will be entitled to 20 votes per share. Each holder
of Class B shares (not including the Company and the Company’s subsidiaries) may convert, at its option, any or all of the
Class B shares held by such holder into an equal number of common shares.



Except as otherwise provided by the BCA,
holders of our common shares and Class B shares will vote together as a single class on all matters submitted to a vote of shareholders,
including the election of directors.



The rights, preferences and privileges
of holders of our shares are subject to the rights of the holders of any preferred shares that have been issued and which we may
issue in the future.



Holders of our common shares do not have
conversion, redemption or pre-emptive rights to subscribe to any of our securities.



There is no limitation on the right to
own securities or the rights of non-resident shareholders to hold or exercise voting rights on our securities under Marshall Islands
law or our articles of incorporation or bylaws.



Preferred Shares



Our articles of incorporation authorize
our board of directors to establish and issue up to 100 million preferred shares and to determine, with respect to any series
of preferred shares, the rights and preferences of that series, including:



| | Ø | the designation of the series;
| | - | ------------------------------



| | Ø | the number of preferred shares in the series;
| | - | ---------------------------------------------



| | Ø | the preferences and relative participating option or other special rights, if any, and any
    qualifications, limitations or restrictions of such series; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | the voting rights, if any, of the holders of the series (subject to terms set forth below
    with regard to the policy of our board of directors regarding preferred shares).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In April 2012 we issued an aggregate of
3,347 Series A Preferred Shares to our two executive officers, but as of December 31, 2016 no Series A Preferred Shares remain
outstanding. The holders of our Series A Preferred Shares will be entitled to receive, if funds are legally available, dividends
payable in cash in an amount per share to be determined by unanimous resolution of our Remuneration Committee, in its sole discretion.
Our board of directors or Remuneration Committee will determine whether funds are legally available under the BCA for such dividend.
Any accrued but unpaid dividends will not bear interest. Except as may be provided in the BCA, holders of our Series A Preferred
Shares do not have any voting rights. Upon our liquidation, dissolution or winding up, the holders of our Series A Preferred Shares
will be entitled to a preference in the amount of the declared and unpaid dividends, if any, as of the date of liquidation, dissolution
or winding up. Our Series A Preferred Shares are not convertible into any of our other capital stock.



The Series A Preferred Shares are redeemable
at the written request of the Remuneration Committee, at par value plus all declared and unpaid dividends as of the date of redemption
plus any additional consideration determined by a unanimous resolution of the Remuneration Committee. We redeemed and cancelled
780 Series A Preferred Shares in January 2013 and the remaining 2,567 were redeemed and cancelled in July 2016.



Liquidation



In the event of our dissolution, liquidation
or winding up, whether voluntary or involuntary, after payment in full of the amounts, if any, required to be paid to our creditors
and the holders of preferred shares, our remaining assets and funds shall be distributed pro rata to the holders of our common
shares and Class B shares, and the holders of common shares and the holders of Class B shares shall be entitled to receive the
same amount per share in respect thereof.



94







Dividends



Declaration and payment of any dividend
is subject to the discretion of our board of directors. The timing and amount of dividend payments to holders of our shares will
depend on a series of factors and risks described under “Item 3.D.  Risk Factors,” and includes risks relating
to earnings, financial condition, cash requirements and availability, restrictions in our current and future loan arrangements,
the provisions of the Marshall Islands law affecting the payment of dividends and other factors. The BCA generally prohibits the
payment of dividends other than from surplus or while we are insolvent or if we would be rendered insolvent upon paying the dividend.



Subject to preferences that may apply
to any shares of preferred stock outstanding at the time, the holders of our common shares and Class B shares will be entitled
to share equally in any dividends that our board of directors may declare from time to time out of funds legally available for
dividends.



Conversion



Our common shares will not be convertible
into any other shares of our capital stock. Each of our Class B shares will be convertible at any time at the election of the
holder thereof into one of our common shares on a one-for-one basis. We will not reissue or resell any Class B shares that shall
have been converted into common shares.



Directors



Our directors will be elected by the vote
of the plurality of the votes cast by holders with voting power of our voting shares. Our articles of incorporation provide that
our board of directors must consist of at least three members. Shareholders may change the number of directors only by the affirmative
vote of holders of a majority of the total voting power of our outstanding capital stock (subject to the rights of any holders
of preferred shares). The board of directors may change the number of directors by a majority vote of the entire board of directors.



No contract or transaction between us
and one or more of our directors or officers will be void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of our board of directors or committee thereof which authorizes the contract
or transaction, or solely because his or her or their votes are counted for such purpose, if (1) the material facts as to such
director’s interest in such contract or transaction and as to any such common directorship, officership or financial interest
are disclosed in good faith or known to the board of directors or committee, and the board of directors or committee approves
such contract or transaction by a vote sufficient for such purpose without counting the vote of such interested director, or,
if the votes of the disinterested directors are insufficient to constitute an act of the board, by unanimous vote of the disinterested
directors; or (2) the material facts as to such director’s interest in such contract or transaction and as to any such common
directorship, officership or financial interest are disclosed in good faith or known to the shareholders entitled to vote thereon,
and such contract or transaction is approved by vote of such shareholders.



Our board of directors has the authority
to fix the compensation of directors for their services.



Classified Board of Directors



Our articles of incorporation provide
for a board of directors serving staggered, three-year terms. Approximately one-third of our board of directors will be elected
each year.



Removal of Directors; Vacancies



Our articles of incorporation provide
that directors may be removed with or without cause upon the affirmative vote of holders of a majority of the total voting power
of our outstanding capital stock. Our bylaws require parties to provide advance written notice of nominations for the election
of directors other than the board of directors and shareholders holding 30% or more of the voting power of the aggregate number
of our shares issued and outstanding and entitled to vote.



No Cumulative Voting



The BCA provides that shareholders are
not entitled to the right to cumulate votes in the election of directors unless our articles of incorporation provide otherwise.
Our articles of incorporation prohibit cumulative voting.



95







Shareholder Meetings



Under our bylaws, annual shareholder meetings
will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands.
Special meetings may be called by the chairman of our board of directors, by resolution of our board of directors or by holders
of 30% or more of the voting power of the aggregate number of our shares issued and outstanding and entitled to vote at such meeting.
Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders
that will be eligible to receive notice and vote at the meeting.



Dissenters’ Right of
Appraisal and Payment



Under the BCA, our shareholders have the
right to dissent from various corporate actions, including certain amendments to our articles of incorporation and certain mergers
or consolidations or the sale of all or substantially all of our assets not made in the usual course of our business, and receive
payment of the fair value of their shares, subject to exceptions. For example, the right of a dissenting shareholder to receive
payment of the fair value of his shares is not available if for the shares of any class or series of stock, which shares at the
record date fixed to determine the shareholders entitled to receive notice of and vote at the meeting of shareholders to act upon
the agreement of merger or consolidation, were either (1) listed on a securities exchange or admitted for trading on an interdealer
quotation system or (2) held of record by more than 2,000 holders. In the event of any further amendment of our articles of incorporation,
a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in
respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the
event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other
things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in
any jurisdiction in which our shares are primarily traded on a local or national securities exchange to fix the value of the shares.



Shareholders’ Derivative Actions



Under the BCA, any of our shareholders
may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder
bringing the action is a holder of common shares or a beneficial interest therein both at the time the derivative action is commenced
and at the time of the transaction to which the action relates or that the shares devolved upon the shareholder by operation of
law.



Amendment to our Articles of Incorporation



Except as otherwise provided by law, any
provision in our articles of incorporation requiring a vote of shareholders may only be amended by such a vote. Further, certain
sections may only be amended by affirmative vote of the holders of at least a majority of the voting power of the voting shares.
In October, 2016 we amended our articles of incorporation in order to enable us to immediately effect a four-for-one one reverse
stock split, reducing the number of outstanding common shares from 10,510,741 to 2,627,674 shares (adjustments were made based
on fractional shares).



Anti-Takeover Effects of Certain Provisions
of our Articles of Incorporation and Bylaws



Mr. George Feidakis, the chairman of our
board of directors, owns beneficially a majority of our total outstanding common shares, and can effectively block any change
in control. Nonetheless, we note that certain provisions of our articles of incorporation and bylaws, which are summarized in
the following paragraphs, may have an anti-takeover effect and may delay, defer or prevent a takeover attempt or hostile change
of control that a shareholder may consider in its best interest, including those attempts that may result in a premium over the
market price for our common shares held by shareholders.



Multiple Classes
of Shares



Should we issue any, our Class B shares
will have 20 votes per share, while our common shares, which is the only class of shares listed on an established U.S. securities
exchange, will have one vote per share. Our board of directors also has authority under our articles of incorporation to issue
blank check preferred shares. Because of this share structure, any issuance of Class B shares or preferred shares may cause such
holders to be able to significantly influence matters submitted to our shareholders for approval even if such holders and their
affiliates come to own significantly less than 50% of the aggregate number of outstanding common shares, Class B shares, and preferred
shares. This control over shareholder voting could discourage others from initiating any potential merger, takeover or other change
of control transaction that other shareholders may view as beneficial and which would require shareholder approval.



96







Blank Check Preferred
Shares



Under the terms of our articles of incorporation,
our board of directors has authority, without any further vote or action by our shareholders, to issue up to 100 million shares
of blank check preferred shares. We currently have no outstanding Series A Preferred Shares. Except as may be provided in the
BCA, holders of our Series A Preferred Shares do not have any voting rights.



Classified Board
of Directors



Our articles of incorporation provide
for a board of directors serving staggered, three-year terms. Approximately one-third of our board of directors will be elected
each year. This classified board of directors provision could discourage a third party from making a tender offer for our shares
or attempting to obtain control of us. It could also delay shareholders who do not agree with the policies of the board of directors
from removing a majority of the board of directors for two years.



No Cumulative Voting



The BCA provides that shareholders are
not entitled to the right to cumulate votes in the election of directors unless our articles of incorporation provide otherwise.
Our articles of incorporation prohibit cumulative voting.



Calling of Special
Meetings of Shareholders



Our bylaws provide that special meetings
of our shareholders may be called only by the chairman of our board of directors, by resolution of our board of directors or by
holders of 30% or more of the voting power of the aggregate number of our shares issued and outstanding and entitled to vote at
such meeting.



Advance Notice
Requirements for Shareholder Proposals and Director Nominations



Our bylaws provide that, with a few exceptions,
shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders
must provide timely notice of their proposal in writing to the corporate secretary.



Generally, to be timely, a shareholder’s
notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the first anniversary
date of the immediately preceding annual meeting of shareholders. Our bylaws also specify requirements as to the form and content
of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting
of shareholders or make nominations for directors at an annual meeting of shareholders.



Business Combinations



Although the BCA does not contain specific
provisions regarding “business combinations” between corporations incorporated under or redomiciled pursuant to the
laws of the Marshall Islands and “interested shareholders,” our articles of incorporation prohibit us from engaging
in a business combination with an interested shareholder for a period of three years following the date of the transaction in
which the person became an interested shareholder, unless, in addition to any other approval that may be required by applicable
law:



| | Ø | prior to the date of the transaction that resulted in the shareholder becoming an interested
    shareholder, our board of directors approved either the business combination or the transaction that resulted in the shareholder
    becoming an interested shareholder;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | upon consummation of the transaction that resulted in the shareholder becoming an interested
    shareholder, the interested shareholder owned at least 85.0% of our voting shares outstanding at the time the transaction
    commenced, excluding for purposes of determining the number of shares outstanding those shares owned by (1) persons who are
    directors and officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially
    whether shares held subject to the plan will be tendered in a tender or exchange offer; or
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | at or after the date of the transaction that resulted in the shareholder becoming an interested
    shareholder, the business combination is approved by our board of directors and authorized at an annual or special meeting
    of shareholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the voting power of the voting
    shares that are not owned by the interested shareholder.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



97







Among other transactions, a “business
combination” includes any merger or consolidation of us or any directly or indirectly majority-owned subsidiary of ours
with (1) the interested shareholder or any of its affiliates or (2) with any corporation, partnership, unincorporated association
or other entity if the merger or consolidation is caused by the interested shareholder. Generally, an “interested shareholder”
is any person or entity (other than us and any direct or indirect majority-owned subsidiary of ours) that:



| | Ø | owns 15.0% or more of our outstanding voting shares;
| | - | ----------------------------------------------------



| | Ø | is an affiliate or associate of ours and was the owner of 15.0% or more of our outstanding
    voting shares at any time within the three-year period immediately prior to the date on which it is sought to be determined
    whether such person is an interested shareholder; or
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | is an affiliate or associate of any person listed in the first two bullets, except that any
    person who owns 15.0% or more of our outstanding voting shares, as a result of action taken solely by us will not be an interested
    shareholder unless such person acquires additional voting shares, except as a result of further action by us and not caused,
    directly or indirectly, by such person.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Additionally, the restrictions regarding
business combinations do not apply to persons that became interested shareholders prior to the effectiveness of our articles of
incorporation.



Limitations on Liability and Indemnification
of Directors and Officers



The BCA authorizes corporations to limit
or eliminate the personal liability of directors to corporations and their shareholders for monetary damages for breaches of certain
directors’ fiduciary duties. Our articles of incorporation include a provision that eliminates the personal liability of
directors for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by law (other than breach
of duty of loyalty, acts not taken in good faith or which involve intentional misconduct or a knowing violation of law or transactions
for which the director derived an improper personal benefit) and provides that we must indemnify our directors and officers to
the fullest extent authorized by law. We are also expressly authorized to advance certain expenses to our directors and officers
and expect to carry directors’ and officers’ insurance providing indemnification for our directors and officers for
some liabilities. We believe that these indemnification provisions and the directors’ and officers’ insurance are
useful to attract and retain qualified directors and executive officers.



The limitation of liability and indemnification
provisions in our articles of incorporation may discourage shareholders from bringing a lawsuit against our directors for breach
of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against
directors and officers, even though such an action, if successful, may otherwise benefit us and our shareholders. In addition,
an investor in our common shares may be adversely affected to the extent we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions.



There is no pending material litigation
or proceeding involving any of our directors, officers or employees for which indemnification is sought.



C.  Material
Contracts



We refer you to “Item 7.B. Related
Party Transactions” for a discussion of our agreements with companies related to us. We also refer you to “Item 4.  Information
on the Company,” “Item 5.B. Liquidity and Capital Resources—Indebtedness” and “Item 6.E. Share
Ownership—Incentives Program” for a description of other material contracts.



Other than these agreements, we have no
material contracts, other than contracts entered into in the ordinary course of business, to which the Company or any member of
the group is a party.



98







D.  Exchange
Controls



We are not aware of any restrictions on
the export or import of capital under Marshall Islands law, including foreign exchange controls or restrictions that affect the
remittance of dividends, interest or other payments to holders of our common shares that are neither residents nor citizens of
the Marshall Islands.



E.  Taxation



Marshall Islands Tax Considerations



The following is applicable only to persons
who are not citizens of and do not reside in, maintain offices in or engage in business in the Marshall Islands.



Because we do not, and we do not expect
that we or any of our future subsidiaries will, conduct business or operations in the Marshall Islands, and because we anticipate
that all documentation related to any offerings of our securities will be executed outside of the Marshall Islands, under current
Marshall Islands law our shareholders will not be subject to Marshall Islands taxation or withholding tax on our distributions.
In addition, our shareholders will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership
or disposition of our common shares, and our shareholders will not be required by the Marshall Islands to file a tax return related
to our common shares.



Malta Tax Considerations



One of our subsidiaries is incorporated
in Malta, which imposes taxes on us that are immaterial to our operations.



Greek Tax Considerations



In January 2013, a tax law 4110/2013 amended
the long-standing provisions of art. 26 of law 27/1975 by imposing a fixed annual tonnage tax on vessels flying a foreign (i.e.,
non-Greek) flag which are managed by a Law 89 company, establishing an identical tonnage tax regime as the one already in force
for vessels flying the Greek flag. This tax varies depending on the size of the vessel, calculated in gross registered tonnage,
as well as on the age of each vessel. Payment of this tonnage tax completely satisfies all income tax obligations of both the
shipowning company and of all its shareholders up to the ultimate beneficial owners. Any tax payable to the state of the flag
of each vessel as a result of its registration with a foreign flag registry (including the Marshall Islands) is subtracted from
the amount of tonnage tax due to the Greek tax authorities.



United States Tax Considerations



This discussion of United States federal
income taxes is based upon provisions of the Code, existing final, temporary and proposed regulations thereunder and current administrative
rulings and court decisions, all as in effect on the effective date of this annual report on Form 20-F and all of which are subject
to change, possibly with retroactive effect. Changes in these authorities may cause the tax consequences to vary substantially
from the consequences described below. No rulings have been or are expected to be sought from the IRS with respect to any of the
United States federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary
positions.



Further, the following summary does not
deal with all United States federal income tax consequences applicable to any given holder of our common shares, nor does it address
the United States federal income tax considerations applicable to categories of investors subject to special taxing rules, such
as expatriates, banks, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt organizations,
dealers or traders in securities or currencies, partnerships, S corporations, estates and trusts, investors that hold their common
shares as part of a hedge, straddle or an integrated or conversion transaction, investors whose “functional currency”
is not the United States dollar or investors that own, directly or indirectly, 10% or more of our stock by vote or value. Furthermore,
the discussion does not address alternative minimum tax consequences or estate or gift tax consequences, or any state tax consequences,
and is limited to shareholders that will hold their common shares as “capital assets” within the meaning of Section
1221 of the Code. Each shareholder is encouraged to consult, and discuss with his or her own tax advisor the United States federal,
state, local and non-United States tax consequences particular to him or her of the acquisition, ownership or disposition of common
shares. Further, it is the responsibility of each shareholder to file all state, local and non-U.S., as well as U.S. federal,
tax returns that may be required of it.



99







United States Federal
Income Taxation of the Company



Taxation of Operating Income



Unless exempt from United States federal
income taxation under the rules described below in “—The Section 883 Exemption,” a foreign corporation that
earns only transportation income is generally subject to United States federal income taxation under one of two alternative tax
regimes: (1) the 4% gross basis tax or (2) the net basis tax and branch profits tax. The Company is a Marshall Islands corporation
and its subsidiaries are incorporated in the Marshall Islands or Malta. There is no comprehensive income tax treaty between the
Marshall Islands and the United States, so the Company and its Marshall Islands subsidiaries cannot claim an exemption from this
tax under a treaty.



The 4% Gross Basis Tax



The United States imposes a 4% United
States federal income tax (without allowance of any deductions) on a foreign corporation’s United States source gross transportation
income to the extent such income is not treated as effectively connected with the conduct of a United States trade or business.
For this purpose, transportation income includes income from the use, hiring or leasing of a vessel, or the performance of services
directly related to the use of a vessel (and thus includes time charter, spot charter and bareboat charter income). The United
States source portion of transportation income is 50% of the income attributable to voyages that begin or end, but not both begin
and end, in the United States. As a result of this sourcing rule the effective tax rate is 2% of the gross income attributable
to U.S. voyages. Generally, no amount of the income from voyages that begin and end outside the United States is treated as United
States source, and consequently none of the transportation income attributable to such voyages is subject to this 4% tax. (Although
the entire amount of transportation income from voyages that begin and end in the United States would be United States source,
neither the Company nor any of its subsidiaries expects to have any transportation income from voyages that both begin and end
in the United States.)



The Net Basis Tax and Branch
Profits Tax



The Company and each of its subsidiaries
do not expect to engage in any activities in the United States (other than port calls of its vessels) or otherwise have a fixed
place of business in the United States. Consequently, the Company and its subsidiaries are not expected to be subject to the net
basis or branch profits taxes. Nonetheless, if this situation were to change or if the Company or a subsidiary of the Company
were to be treated as engaged in a United States trade or business, all or a portion of the Company’s or such subsidiary’s
taxable income, including gain from the sale of vessels, could be treated as effectively connected with the conduct of this United
States trade or business, or effectively connected income. Any effectively connected income, net of allowable deductions, would
be subject to United States federal corporate income tax (with the highest statutory rate currently being 35%). In addition, an
additional 30% branch profits tax would be imposed on the Company or such subsidiary at such time as the Company’s or such
subsidiary’s after-tax effectively connected income is deemed to have been repatriated to the Company’s or subsidiary’s
offshore office.



The 4% gross basis tax described above
is inapplicable to income that is treated as effectively connected income. A non-United States corporation’s United States
source transportation income would be considered to be effectively connected income only if the non-United States corporation
has or is treated as having a fixed place of business in the United States involved in the earning of the transportation income
and substantially all of its United States source transportation income is attributable to regularly scheduled transportation
(such as a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end
in the United States), or in the case of leasing income (such as bareboat charter income) is attributable to such fixed place
of business. The Company and its vessel-owning subsidiaries believe that their vessels will not operate to and from the United
States on a regularly scheduled basis. Based on the intended mode of shipping operations and other activities, the Company and
its vessel-owning subsidiaries do not expect to have any effectively connected income.



The Section 883 Exemption



Both the 4% gross basis tax and the net
basis and branch profits taxes described above are inapplicable to transportation income that qualifies for the Section 883 Exemption.
To qualify for the Section 883 Exemption a foreign corporation must, among other things:



| | Ø | be organized in a jurisdiction outside the United States that grants an equivalent exemption
    from tax to corporations organized in the United States (an “Equivalent Exemption”);
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | satisfy one of the following three ownership tests (discussed in more detail below): (1) the
    more than 50% ownership test, or 50% Ownership Test, (2) the controlled foreign corporation test, or CFC Test, or (3) the
    “Publicly Traded Test”; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



100







| | Ø | meet certain substantiation, reporting and other requirements (which include the filing of
    United States income tax returns).
| | - | ---------------------------------------------------------------------------------------------------------------------------------



The Company is a Marshall Islands corporation,
and each of the vessels in its fleet is owned by a separate wholly owned subsidiary organized in the Marshall Islands or Malta.
The U.S. Department of the Treasury recognizes the Marshall Islands and Malta as jurisdictions which grant an Equivalent Exemption;
therefore, the Company and each of its vessel-owning subsidiaries meet the first requirement for the Section 883 Exemption.



The 50 % Ownership Test



In order to satisfy the 50% Ownership
Test, a non-United States corporation must be able to substantiate that more than 50% of the value of its shares is owned, directly
or indirectly, by “qualified shareholders.” For this purpose, qualified shareholders are: (1) individuals who are
residents (as defined in the Treasury regulations promulgated under Section 883 of the Code, or Section 883 Regulations) of countries,
other than the United States, that grant an Equivalent Exemption, (2) non-United States corporations that meet the Publicly Traded
Test of the Section 883 Regulations and are organized in countries that grant an Equivalent Exemption, or (3) certain foreign
governments, non-profit organizations, and certain beneficiaries of foreign pension funds. In order for a shareholder to be a
qualified shareholder, there generally cannot be any bearer shares in the chain of ownership between the shareholder and the taxpayer
claiming the exemption (unless such bearer shares are maintained in a dematerialized or immobilized book-entry system as permitted
under the Section 883 Regulations). A corporation claiming the Section 883 Exemption based on the 50% Ownership Test must obtain
all the facts necessary to satisfy the IRS that the 50% Ownership Test has been satisfied (as detailed in the Section 883 Regulations).
For the taxable year ended December 31, 2016, the Company believes that each of its vessel-owning subsidiaries satisfied the 50%
Ownership Test based on the beneficial ownership of more than 50% of the value of its shares by a qualifying shareholder, assuming
that such shareholder meets all of the substantiation and reporting requirements under Section 883 of the Code and the Section
883 Regulations for such taxable year, and that each such subsidiary should therefore qualify for the Section 883 Exemption for
such taxable year.



The CFC Test



The CFC Test requires that a non-United
States corporation be treated as a controlled foreign corporation, or a CFC, for United States federal income tax purposes for
more than half of the days in the taxable year. A CFC is a foreign corporation, more than 50% of the vote or value of which is
owned by significant U.S. shareholders (meaning U.S. persons who own at least 10% of the voting power of the foreign corporation).
In addition, more than 50% of the value of the shares of the CFC must be owned by qualifying U.S. persons for more than half of
the days during the taxable year concurrent with the period of time that the company qualifies as a CFC. For this purpose, a qualifying
U.S. person is defined as a U.S. citizen or resident alien, a domestic corporation or domestic tax-exempt trust, in each case,
if such U.S. person provides the company claiming the exemption with an ownership statement. The Company does not believe that
the requirements of the CFC Test will be met in the near future with respect to the Company or any of its subsidiaries.



The Publicly Traded Test



The Publicly Traded Test requires that
one or more classes of equity representing more than 50% of the voting power and value in a non-United States corporation be “primarily
and regularly traded” on an established securities market either in the United States or in a foreign country that grants
an Equivalent Exemption. The Section 883 Regulations provide, in relevant part, that the shares of a non-United States corporation
will be considered to be “primarily traded” on an established securities market in a country if the number of shares
of each class of shares that are traded during any taxable year on all established securities markets in that country exceeds
the number of shares in each such class that are traded during that year on established securities markets in any other single
country. The Section 883 Regulations also generally provide that shares will be considered to be “regularly traded”
on an established securities market if one or more classes of shares in the corporation representing in the aggregate more than
50% of the total combined voting power and value of all classes of shares of the corporation are listed on an established securities
market. Also, with respect to each class relied upon to meet this requirement (1) such class of shares must be traded on the market,
other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year,
and (2) the aggregate number of shares of such class of shares traded on such market during the taxable year is at least 10% of
the average number of shares of such class of shares outstanding during such year or as adjusted for a short taxable year. These
two tests are deemed to be satisfied if such class of shares is traded on an established market in the United States and such
shares are regularly quoted by dealers making a market in such shares.



101







Notwithstanding the foregoing, the Section
883 Regulations provide, in relevant part, that a class of shares will not be considered to be “regularly traded”
on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares
of such class are owned, actually or constructively under specified share attribution rules, on more than half the days during
the taxable year by persons who each own 5% or more of the vote and value of such class of outstanding shares, to which we refer
as the 5 Percent Override Rule.



For purposes of being able to determine
the person who actually or constructively own 5% or more of the vote and value of the Company’s common shares, or 5% Shareholders,
the Section 883 Regulations permit a company whose stock is traded on an established securities market in the United States to
rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as owning 5% or more of the company’s
common shares.



In the event the 5 Percent Override Rule
is triggered, the Section 883 Regulations provide that such rule will not apply if the Company can establish that within the group
of 5% Shareholders, there are sufficient qualified shareholders within the meaning of Section 883 and the Section 883 Regulations
to preclude non-qualified shareholders in such group from owning 50% or more of the total value of the Company’s common
shares for more than half the number of days during the taxable year.



The Company and its vessel-owning subsidiaries
should satisfy the 50% Ownership Test. It is also possible that the Company satisfies the Publicly Traded Test. However, if the
Company’s common shares are delisted (as described in “Item 3.D. Risk Factors—Company Specific Risk Factors—Our
common shares may be delisted from Nasdaq, which could affect their market price and liquidity”), the Publicly Traded Test
generally would not be met. The stock in the Company’s vessel-owning subsidiaries is not publicly traded, but if the Company
meets the Publicly Traded Test described above, the Company also may be a qualifying shareholder for purposes of applying the
50% Ownership Test as to any subsidiary claiming the Section 883 Exemption. However, if for any period after the Company issues
the Class B shares, the common shares represent less than 50% of the voting power of the Company, the Company would not be able
to satisfy the Publicly Traded Test for such period because less than 50% of the stock of the Company, measured by voting power,
would be listed on an established securities market.



A foreign corporation can only claim the
Section 883 Exemption if it receives the ownership statements required under the Section 883 Regulations certifying as to the
matters required to satisfy the relevant ownership test. Each of our vessel-owning subsidiaries has received, or expects to receive,
ownership statements, valid for the year ended December 31, 2016, certifying the qualifying shareholder status of a shareholder
beneficially owning more than 50% of the value of each such subsidiary’s stock and the status of intermediaries as required
to support a claim by each vessel-owning subsidiary of the Section 883 Exemption.



Each of the Company’s vessel-owning
subsidiaries has claimed the Section 883 Exemption on the basis that it satisfies the 50% Ownership Test and the Company intends
to continue to comply with the substantiation, reporting and other requirements that are applicable under Section 883 of the Code
to enable such subsidiaries to claim the exemption on this basis.



In the future, if the shareholders or
the relative ownership in the Company changes, if the Company believes that it (or its subsidiaries) can qualify for the Section
883 Exemption, each shareholder who is or may be a qualifying person will be asked to provide to the Company an ownership statement
for purposes of substantiating the relevant company’s entitlement to the exemption. An ownership statement is required to
be signed by the shareholder under penalties of perjury and contains information regarding the residence of the shareholder and
its ownership in the company claiming the Section 883 Exemption. If the Company or a subsidiary needs to obtain additional ownership
statements in order to establish a Section 883 Exemption, there is no guarantee that shareholders representing a sufficient ownership
interest in the Company or any of its subsidiaries will provide ownership statements to the relevant company so that it will satisfy
any of the Section 883 ownership tests and the Section 883 Exemption would not apply to the Company. If in future years the shareholders
fail to update or correct such statements, the Company and its subsidiaries may be unable to continue to qualify for the Section
883 Exemption.



A corporation’s qualification for
the Section 883 Exemption is determined for each taxable year. If the Company and/or its subsidiaries were not to qualify for
the Section 883 Exemption in any year, the United States income taxes that become payable would have a negative effect on the
business of the Company and its subsidiaries, and would result in decreased earnings available for distribution to the Company’s
shareholders.



102







United States Taxation of Gain on Sale
of Vessels



If the Company’s subsidiaries qualify
for the Section 883 Exemption, then gain from the sale of any vessel would be exempt from tax under Section 883. If, however,
the gain is not exempt from tax under Section 883, the Company will not be subject to United States federal income taxation with
respect to such gain provided that the income from the vessel has never constituted effectively connected income and that the
sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale
of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss
with respect to the vessel, pass to the buyer outside of the United States. To the extent possible, the Company will attempt to
structure any sale of a vessel so that it is considered to occur outside of the United States.



United States Federal
Income Taxation of United States Holders



As used herein, “United States Holder”
means a beneficial owner of the Company’s common shares that is an individual citizen or resident of the United States for
United States federal income tax purposes, a corporation or other entity taxable as a corporation created or organized in or under
the laws of the United States or any state thereof (including the District of Columbia), an estate the income of which is subject
to United States federal income taxation regardless of its source or a trust where a court within the United States is able to
exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code)
have the authority to control all substantial decisions of the trust (or a trust that has made a valid election under U.S. Department
of the Treasury regulations to be treated as a domestic trust). A “Non-United States Holder” generally means any owner
(or beneficial owner) of common shares that is not a United States Holder, other than a partnership. If a partnership holds common
shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership.
Partners of partnerships holding common shares should consult their own tax advisors regarding the tax consequences of an investment
in the common shares (including their status as United States Holders or Non-United States Holders).



Distributions



Subject to the discussion of PFICs below,
any distributions made by the Company with respect to the common shares to a United States Holder will generally constitute dividends,
which may be taxable as ordinary income or qualified dividend income as described in more detail below, to the extent of the Company’s
current or accumulated earnings and profits as determined under United States federal income tax principles. Distributions in
excess of the Company’s earnings and profits will be treated as a nontaxable return of capital to the extent of the United
States Holder’s tax basis in its common shares and, thereafter, as capital gain. United States Holders that are corporations
generally will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us.



Dividends paid in respect of the Company’s
common shares may qualify for the preferential rate attributable to qualified dividend income if: (1) the common shares are readily
tradable on an established securities market in the United States; (2) the Company is not a PFIC for the taxable year during which
the dividend is paid or in the immediately preceding taxable year; (3) the United States Holder has owned the common shares for
more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend and (4)
the United States Holder is not under an obligation to make related payments with respect to positions in substantially similar
or related property. The first requirement currently is and has been met, as our common shares were listed on the Nasdaq Global
Market until they became listed on the Nasdaq Capital Market with effect from April 11, 2016. Both the Nasdaq Global Market and
the Nasdaq Capital Market are tiers of the Nasdaq Stock Market, which is an established securities market. Further, there is no
minimal trading requirement for shares to be “readily tradable,” so as long as our common shares remain listed on
the Nasdaq Capital Market or the Nasdaq Global Market or any other established securities market in the United States, the first
requirement will be satisfied. However, if our common shares are delisted and are not tradable on an established securities market
in the United States (as described in “Item 3.D. Risk Factors—Company Specific Risk Factors—Our common shares
may be delisted from Nasdaq, which could affect their market price and liquidity”), the first requirement would not be satisfied,
and dividends paid in respect of our common shares would not qualify for the preferential rate attributable to qualified dividend
income. The second requirement is expected to be met as more fully described below under “—Consequences of Possible
PFIC Classification.” Satisfaction of the final two requirements will depend on the particular circumstances of each United
States Holder. Consequently, if any of these requirements are not met, the dividends paid to individual United States Holders
in respect of the Company’s common shares would not be treated as qualified dividend income and would be taxed as ordinary
income at ordinary rates.



103







Amounts taxable as dividends generally
will be treated as income from sources outside the United States and will, depending on your circumstances, be “passive”
or “general” income which, in either case, is treated separately from other types of income for purposes of computing
the foreign tax credit allowable to you. However, if (1) the Company is 50% or more owned, by vote or value, by United States
persons and (2) at least 10% of the Company’s earnings and profits are attributable to sources within the United States,
then for foreign tax credit purposes, a portion of our dividends would be treated as derived from sources within the United States.
Under such circumstances, with respect to any dividend paid for any taxable year, the United States source ratio of the Company’s
dividends for foreign tax credit purposes would be equal to the portion of the Company’s earnings and profits from sources
within the United States for such taxable year, divided by the total amount of the Company’s earnings and profits for such
taxable year.



Consequences
of Possible PFIC Classification



A non-United States entity treated as
a corporation for United States federal income tax purposes will be a PFIC in any taxable year in which, after taking into account
the income and assets of the corporation and certain subsidiaries pursuant to a “look through” rule, either: (1) 75%
or more of its gross income is “passive” income or (2) 50% or more of the average value of its assets is attributable
to assets that produce passive income or are held for the production of passive income. If a corporation is a PFIC in any taxable
year that a person holds shares in the corporation (and was not a qualified electing fund with respect to such year, as discussed
below), the shares held by such person will be treated as shares in a PFIC for all future years (absent an election which, if
made, may require the electing person to pay taxes in the year of the election). A United States Holder of shares in a PFIC would
be required to file an annual information return on IRS Form 8621 containing information regarding the PFIC as required by U.S.
Department of the Treasury regulations.



While there are legal uncertainties involved
in this determination, including as a result of adverse case law described herein, based upon the Company’s and its subsidiaries’
expected operations as described herein and based upon the current and expected future activities and operations of the Company
and its subsidiaries, the income of the Company and such subsidiaries from time charters should not constitute “passive
income” for purposes of applying the PFIC rules, and the assets that the Company owns for the production of this time charter
income should not constitute passive assets for purposes of applying the PFIC rules.



Although there is no legal authority directly
on point, this view is based principally on the position that the gross income that the Company and its subsidiaries derive from
time charters constitutes services income rather than passive rental income. The Fifth Circuit Court of Appeals decided in Tidewater
Inc. v. United States, 565 F.3d 299 (5th Cir., 2009) that a typical time charter is a lease, and not a contract for the provision
of transportation services. In that case, the court was considering a tax issue that turned on whether the taxpayer was a lessor
where a vessel was under a time charter, and the court did not address the definition of passive income or the PFIC rules; however,
the reasoning of the case could have implications as to how the income from a time charter would be classified under such rules.
If the reasoning of the Tidewater case is applied to the Company’s situation and the Company’s or its subsidiaries’
time charters are treated as leases, the Company’s or its subsidiaries’ time charter income could be classified as
rental income and the Company would be a PFIC unless more than 25% of the income of the Company (taking into account the subsidiary
look through rule) is from spot charters plus other active income or an active leasing exception applies. The IRS has announced
that it will not follow the reasoning of the Tidewater case and would have treated the income from the time charters at issue
in that case as services income, including for other purposes of the Code. The Company intends to take the position that all of
its time, voyage and spot chartering activities will generate active services income and not passive leasing income, but in the
absence of direct legal authority specifically relating to the Code provisions governing PFICs, the IRS or a court could disagree
with this position. Although the matter is not free from doubt as described herein, based on the current operations and activities
of the Company and its subsidiaries and on the relative values of the vessels in the Company’s fleet and the charter income
in respect of the vessels, Globus Maritime Limited should not be treated as a PFIC during the taxable year ended December 31,
2016.



Based on the Company’s intention
and expectation that the Company’s subsidiaries’ income from spot, time and voyage chartering activities plus other
active operating income will be greater than 25% of the Company’s total gross income at all relevant times and that the
gross value of the vessels subject to such time, voyage or spot charters will exceed the gross value of all the passive assets
the Company owns at all relevant times, Globus Maritime Limited does not expect that it will constitute a PFIC with respect to
a taxable year in the near future.



The Company will try to manage its vessels
and its business so as to avoid being classified as a PFIC for a future taxable year; however there can be no assurance that the
nature of the Company’s assets, income and operations will remain the same in the future (notwithstanding the Company’s
current expectations). Additionally, no assurance can be given that the IRS or a court of law will accept the Company’s
position that the time charters that the Company’s subsidiaries have entered into or any other time charter that the Company
or a subsidiary may enter into will give rise to active income rather than passive income for purposes of the PFIC rules, or that
future changes of law will not adversely affect this position. The Company has not obtained a ruling from the IRS on its time
charters or its PFIC status and does not intend to seek one. Any contest with the IRS may materially and adversely impact the
market for the common shares and the prices at which they trade. In addition, the costs of any contest on the issue with the IRS
will result in a reduction in cash available for distribution and thus will be borne indirectly by the Company’s shareholders.



104







If Globus Maritime Limited were to be
classified as a PFIC in any year, each United States Holder of the Company’s shares will be subject (in that year and all
subsequent years) to special rules with respect to: (1) any “excess distribution” (generally defined as any distribution
received by a shareholder in a taxable year that is greater than 125% of the average annual distributions received by the shareholder
in the three preceding taxable years or, if shorter, the shareholder’s holding period for the shares), and (2) any gain
realized upon the sale or other disposition of the common shares. Under these rules:



| | Ø | the excess distribution or gain will be allocated ratably over the United States Holder’s
    holding period;
| | - | -------------------------------------------------------------------------------------------------------------



| | Ø | the amount allocated to the current taxable year and any year prior to the first year in which
    the Company was a PFIC will be taxed as ordinary income in the current year; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | the amount allocated to each of the other taxable years in the United States Holder’s
    holding period will be subject to United States federal income tax at the highest rate in effect for the applicable class
    of taxpayer for that year, and an interest charge will be added as though the amount of the taxes computed with respect to
    these other taxable years were overdue.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In order to avoid the application of the
PFIC rules, United States Holders may make a qualified electing fund, or a QEF, election provided in Section 1295 of the Code
in respect of their common shares. Even if a United States Holder makes a QEF election for a taxable year of the Company, if the
Company was a PFIC for a prior taxable year during which such holder held the common shares and for which such holder did not
make a timely QEF election, the United States Holder would also be subject to the more adverse rules described above. Additionally,
to the extent any of the Company’s subsidiaries is a PFIC, an election by a United States Holder to treat Globus Maritime
Limited as a QEF would not be effective with respect to such holder’s deemed ownership of the stock of such subsidiary and
a separate QEF election with respect to such subsidiary is required. In lieu of the PFIC rules discussed above, a United States
Holder that makes a timely, valid QEF election will, in very general terms, be required to include its pro rata share of the Company’s
ordinary income and net capital gains, unreduced by any prior year losses, in income for each taxable year (as ordinary income
and long-term capital gain, respectively) and to pay tax thereon, even if no actual distributions are received for that year in
respect of the common shares and even if the amount of that income is not the same as the amount of actual distributions paid
on the common shares during the year. If the Company later distributes the income or gain on which the United States Holder has
already paid taxes under the QEF rules, the amounts so distributed will not again be subject to tax in the hands of the United
States Holder. A United States Holder’s tax basis in any common shares as to which a QEF election has been validly made
will be increased by the amount included in such United States Holder’s income as a result of the QEF election and decreased
by the amount of nontaxable distributions received by the United States Holder. On the disposition of a common share, a United
States Holder making the QEF election generally will recognize capital gain or loss equal to the difference, if any, between the
amount realized upon such disposition and its adjusted tax basis in the common share. In general, a QEF election should be made
by filing a Form 8621 with the United States Holder’s federal income tax return on or before the due date for filing such
United States Holder’s federal income tax return for the first taxable year for which the Company is a PFIC or, if later,
the first taxable year for which the United States Holder held common shares. In this regard, a QEF election is effective only
if certain required information is made available by the PFIC. Subsequent to the date that the Company first determines that it
is a PFIC, the Company will use commercially reasonable efforts to provide any United States Holder of common shares, upon request,
with the information necessary for such United States Holder to make the QEF election.



In addition to the QEF election, Section
1296 of the Code permits United States Holders to make a “mark-to-market” election with respect to marketable shares
in a PFIC, generally meaning shares regularly traded on a qualified exchange or market and certain other shares considered marketable
under U.S. Department of the Treasury regulations. For this purpose, a class of shares is regularly traded on a qualified exchange
or market for any calendar year during which such class of shares is traded, other than in de minimis quantities, on at least
15 days during each calendar quarter of the year. Our common shares historically have been regularly traded on the Nasdaq Capital
Market or the Nasdaq Global Market, which are established securities markets. However, if our common shares were to be delisted,
(as described in “Item 3.D. Risk Factors—Company Specific Risk Factors—Our common shares may be delisted from
Nasdaq, which could affect their market price and liquidity”), then the mark-to-market election generally would be unavailable
to United States Holders. If a United States Holder makes a mark-to-market election in respect of its common shares, such United
States Holder generally would, in each taxable year: (1) include as ordinary income the excess, if any, of the fair market value
of the common shares at the end of the taxable year over such United States Holder’s adjusted tax basis in the common shares,
and (2) be permitted an ordinary loss in respect of the excess, if any, of such United States Holder’s adjusted tax basis
in the common shares over their fair market value at the end of the taxable year, but only to the extent of the net amount previously
included in income as a result of the mark-to-market election (with the United States Holder’s basis in the common shares
being increased and decreased, respectively, by the amount of such ordinary income or ordinary loss). The consequences of this
election may be less favorable than those of a QEF election for United States Holders that are sensitive to the distinction between
ordinary income and capital gain.



105







United States Holders are urged to consult
their tax advisors as to the consequences of making a mark-to-market or QEF election, as well as other United States federal income
tax consequences of holding shares in a PFIC.



As previously indicated, if the Company
were to be classified as a PFIC for a taxable year in which the Company pays a dividend or the immediately preceding taxable year,
dividends paid by the Company would not constitute “qualified dividend income” and, hence, would not be eligible for
the reduced rate of United States federal income tax.



Consequences
of Controlled Foreign Corporation Classification of the Company



If more than 50% of either the total combined
voting power of the shares of the Company entitled to vote or the total value of all of the Company’s outstanding shares
were owned, directly, indirectly or constructively by (i) citizens or residents of the United States, (ii) U.S. partnerships or
corporations, or U.S. estates or trusts (as defined for U.S. federal income tax purposes), each of which owned, directly, indirectly
or constructively 10% or more of the total combined voting power of the Company shares entitled to vote (each a “U.S. Shareholder”),
the Company and its wholly owned subsidiaries generally would be treated as CFCs. U.S. Shareholders of a CFC are treated as receiving
current distributions of their shares of Subpart F Income of the CFC even if they do not receive actual distributions. The Company
or its subsidiaries may have income that would be treated as Subpart F Income, such as interest income, services income of Globus
Shipmanagement or passive leasing income in respect of vessel charters. Consequently, any United States Holders who are also U.S.
Shareholders may be required to include in their U.S. federal taxable income their pro rata share of the Subpart F income of the
Company and its subsidiaries, regardless of the amount of cash distributions received. The Company believes that its time charter
income will not be treated as passive rental income, but there can be no assurance that the IRS will accept this position. Please
read “—United States Federal Income Taxation of United States Holders—Consequences of Possible PFIC Classification.”



In the case where the Company and its
subsidiaries are CFCs, to the extent that the Company’s distributions to a United States Holder who is also a U.S. Shareholder
are attributable to prior inclusions of Subpart F income of such United States Holder, such distributions are not required to
be reported as additional income of such United States Holder.



Whether or not the Company or a subsidiary
will be a CFC will depend on the identity of the shareholders of the Company during each taxable year of the Company. As of the
date of this annual report on Form 20-F, the Company should not be a CFC based on the current shareholders in the Company.



If the Company or one of its subsidiaries
is a CFC, certain burdensome U.S. federal income tax and administrative requirements would apply to United States Holders that
are U.S. Shareholders, but such United States Holders generally would not also be subject to all of the requirements generally
applicable to owners of a PFIC. For example, a United States Holder that is a U.S. Shareholder will be required to annually file
IRS Form 5471 to report certain aspects of its indirect ownership of a CFC. United States Holders should consult with their own
tax advisors as to the consequences to them of being a U.S. Shareholder in a CFC.



Sale, Exchange
or Other Disposition of Common Shares



A United States Holder generally will
recognize taxable gain or loss upon a sale, exchange or other disposition of common shares in an amount equal to the difference
between the amount realized by the United States Holder from such sale, exchange or other disposition and the United States Holder’s
tax basis in such common shares. Assuming the Company does not constitute a PFIC for any taxable year, this gain or loss will
generally be treated as long-term capital gain or loss if the United States Holder’s holding period is greater than one
year at the time of the sale, exchange or other disposition. Long term capital gains recognized by a United States Holder other
than a corporation are generally taxed at preferential rates. A United States Holder’s ability to deduct capital losses
is subject to limitations.



106







United States
Federal Income Taxation of Non-United States Holders



A Non-United States Holder will generally
not be subject to United States federal income tax on dividends paid in respect of the common shares or on gains recognized in
connection with the sale or other disposition of the common shares provided that the Non-United States Holder makes certain tax
representations regarding the identity of the beneficial owner of the common shares, that such dividends or gains are not effectively
connected with the Non-United States Holder’s conduct of a United States trade or business and that, with respect to gain
recognized in connection with the sale or other disposition of the common shares by a non-resident alien individual, such individual
is not present in the United States for 183 days or more in the taxable year of the sale or other disposition and other conditions
are met. If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax
purposes, the income from the common shares, including dividends and gain from the sale, exchange or other disposition of the
common stock, that is effectively connected with the conduct of that trade or business will generally be subject to regular United
States federal income tax in the same manner as discussed above relating to the taxation of United States Holders.



Net Investment
Income Tax



A United States Holder that is an individual
or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax
on the lesser of (1) such United States Holder’s “net investment income” (or undistributed “net investment
income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such United States Holder’s
modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between
$125,000 and $250,000, depending on the individual’s circumstances). A United States Holder’s net investment income
will generally include its gross dividend income and its net gains from the disposition of the common shares, unless such dividends
or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists
of certain passive or trading activities). Net investment income generally will not include a United States Holder’s pro
rata share of the Company’s income and gain (if we are a PFIC and that United States Holder makes a QEF election, as described
above in “—United States Federal Income Taxation of United States Holders—Consequences of Possible PFIC Classification”)
or Subpart F Income (if we are a CFC with respect to which a United States Holder is a “U.S. Shareholder,” as described
above in “—United States Federal Income Taxation of United States Holders— Consequences of Controlled Foreign
Corporation Classification of the Company”). However, a United States Holder may elect to treat inclusions of income and
gain from a QEF election or Subpart F Income as net investment income. Failure to make this election could result in a mismatch
between a United States Holder’s ordinary income and net investment income. If you are a United States Holder that is an
individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of the net investment income
tax to your income and gains in respect of your investment in the common shares.



Backup Withholding
and Information Reporting



Information reporting to the IRS may be
required with respect to payments on the common shares and with respect to proceeds from the sale of the common shares. With respect
to Non-United States Holders, copies of such information returns may be made available to the tax authorities in the country in
which the Non-United States Holder resides under the provisions of any applicable income tax treaty or exchange of information
agreement. A “backup” withholding tax may also apply to those payments if:



| | Ø | a holder of the common shares fails to provide certain identifying information (such as the
    holder’s taxpayer identification number or an attestation to the status of the holder as a Non-United States Holder);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | such holder is notified by the IRS that he or she has failed to report all interest or dividends
    required to be shown on his or her federal income tax returns; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | in certain circumstances, such holder has failed to comply with applicable certification requirements.
| | - | ------------------------------------------------------------------------------------------------------



Backup withholding is not an additional
tax and may be refunded (or credited against the holder’s United States federal income tax liability, if any), provided
that certain required information is furnished to the IRS in a timely manner.



Non-United States Holders may be required
to establish their exemption from information reporting and backup withholding by certifying their status on IRS Form W-8BEN,
W-8BEN-E, W-8ECI or W-8IMY, as applicable.



United States Holders of common shares
may be required to file forms with the IRS under the applicable reporting provisions of the Code. For example, such United States
Holders may be required, under Sections 6038, 6038B and/or 6046 of the Code, and the regulations thereunder, to supply the IRS
with certain information regarding the United States Holder, other United States Holders and the Company if (1) such person owns
at least 10% of the total value or 10% of the total combined voting power of all classes of shares entitled to vote or (2) the
acquisition of our common shares, when aggregated with certain other acquisitions that may be treated as related under applicable
regulations, exceeds $100,000 in value. In the event a United States Holder fails to file a form when required to do so, the United
States Holder could be subject to substantial tax penalties.  You should consult your tax advisor regarding the filing of
these forms.



107







Individual United States Holders who hold
certain specified foreign assets with values in excess of certain dollar thresholds are required to report such assets on IRS
Form 8938 with their United States federal income tax return, subject to certain exceptions (including an exception for foreign
assets held in accounts maintained by financial institutions). Stock in a foreign corporation, including our common shares, is
a specified foreign asset for this purpose. Penalties apply for failure to properly complete and file Form 8938. You should consult
your tax advisor regarding the filing of this form.



We encourage each United States Holder
and Non-United States Holder to consult with his, her or its own tax advisor as to the particular tax consequences to him, her
or it of holding and disposing of the Company’s common shares, including the applicability of any federal, state, local
or foreign tax laws and any proposed changes in applicable law.



F.  Dividends
and Paying Agents



Not Applicable.



G.  Statement
by Experts



Not Applicable.



H.  Documents
on Display



We file reports and other information
with the SEC. These materials, including this annual report on Form 20-F and the accompanying exhibits, may be inspected and copied
at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, or from the SEC’s
website http://www.sec.gov. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330
and you may obtain copies at prescribed rates.



I.  Subsidiary
Information



Not Applicable.



108







Item 11.  Quantitative and
Qualitative Disclosures About Market Risk



Interest Rates



We are exposed to market risks associated
with changes in interest rates relating to our loan arrangements with Commerzbank, DVB Bank and HSH. As of December 31, 2016,
we had a $19.3 million principal balance outstanding under the DVB Loan Agreement with DVB Bank and a $25.9 million principal
balance outstanding under the HSH Loan Agreement.



In December 2013, we entered into a revolving
credit facility with a credit limit up to $4.0 million, which subsequently increased to $20.0 million in December 2015, with Firment
Trading Limited, a related party to us, for the purpose of financing our general working capital needs. We are not exposed to
market risk with respect to this credit facility because interest is charged at a fixed rate of 5% per annum.



In January 2016, we entered into a credit
facility for up to $3.0 million with Silaner Investments Limited, a related party to us, for the purpose of financing our general
working capital needs. We are not exposed to market risk with respect to this credit facility because interest is charged at a
fixed rate of 5% per annum.



In connection with the February 2017 private
placement, the Company repaid both of the Firment and Silaner Credit Facilities in their entirety, but they remain available to
us.



Interest costs incurred under our loan
arrangements are included in our consolidated statement of comprehensive income.

In 2016, the weighted average interest
rate for our then-outstanding facilities in total was 3.52% and the respective interest rates on our loan agreements, other than
the Firment Credit Facility, ranged from 3% to 3.9%, including margins.



We will continue to have debt outstanding,
which could impact our results of operations and financial condition. Although we may in the future prefer to generate funds through
equity offerings on terms acceptable to us rather than through the use of debt arrangements, we may not be able to do so. We expect
to manage any exposure in interest rates through our regular operating and financing activities and, when deemed appropriate,
through the use of derivative financial instruments.



During 2008 we entered into two interest
rate swap agreements in order to manage the risk associated with changing interest rates. Both swap agreements reached maturity
in November 2013. The total notional principal amount of these swaps was $25 million, which had specified rates and durations.



The following table sets forth the sensitivity
of our existing loans as of December 31, 2016 as to a 1.0% (100 basis points) increase in LIBOR, during the next five years, and
reflects the additional interest expense that will be incurred.





|Year |  |   | Amount                                             | 
|---- |  | - | -------------------------------------------------- | 
|2017 |  | $ | 0.4
                                       million | 
|2018 |  | $ | 0.4
                                       million | 
|2019 |  | $ | 0.2
                                       million | 
|2020 |  | $ | -                                                  | 
|2021 |  | $ | -                                                  | 





Currency and Exchange Rates



We generate revenues from the trading
of our vessels in U.S. dollars but historically incur certain amounts of our operating expenses in currencies other than the U.S.
dollar. When we were incorporated in Jersey, the majority of our general and administrative expenses (including stock exchange
fees and advisor fees) were payable in U.K. pounds sterling. For cash management, or treasury, purposes, we convert U.S. dollars
into foreign currencies which we then hold on deposit until the date of each transaction. Fluctuations in foreign exchange rates
create foreign exchange gains or losses when we mark-to-market these non-U.S. dollar deposits.



For accounting purposes, expenses incurred
in Euro and other foreign currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction.
Because a portion of our expenses are incurred in currencies other than the U.S. dollar, our expenses may from time to time increase
relative to our revenues as a result of fluctuations in exchange rates, which could affect the amount of net income that we report
in future periods. While we historically have not mitigated the risk associated with exchange rate fluctuations through the use
of financial derivatives, we may determine to employ such instruments from time to time in the future in order to minimize this
risk. Our use of financial derivatives would involve certain risks, including the risk that losses on a hedged position could
exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable
or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.



109







Commodity Risk Exposure



The price and supply of fuel is unpredictable
and fluctuates as a result of events outside our control, including geo-political developments, supply and demand for oil and
gas, actions by members of the Organization of Petroleum Exporting Countries and other oil and gas producers, war and unrest in
oil producing countries and regions, regional production patterns and environmental concerns and regulations. Because we do not
intend to hedge our fuel costs, an increase in the price of fuel beyond our expectations may adversely affect our profitability,
cash flows and ability to pay dividends. However, all of our vessels are employed on time charter contracts, where the fuel costs
are assumed by our customers.



Inflation



We do not expect inflation to be a significant
risk to us in the current and foreseeable economic environment. In the event that inflation becomes a significant factor in the
global economy, inflationary pressures would result in increased operating, voyage and finance costs.



Item 12.  Description of
Securities Other than Equity Securities



Not Applicable.



PART II



Item 13.  Defaults, Dividend
Arrearages and Delinquencies



Not Applicable.



Item 14.  Material Modifications
to the Rights of Security Holders and Use of Proceeds



In April 2012, we filed a Certificate
of Designation, Preferences and Rights of Series A Preferred Stock with the Marshall Islands, setting forth the preferences and
rights of our Series A Preferred Shares, which are described in “Item 10.B. Memorandum and Articles of Association—Preferred
Shares.” In April 2012, we issued to our two executive officers, an aggregate of 3,347 Series A Preferred Shares. In January
2013, we redeemed 780 of these Series A Preferred Shares. In July 2016, we redeemed the remaining 2,567 of these Series A Preferred
Shares. Holders of Series A Preferred Shares may receive dividends prior to the holders of our shares, and also have a liquidation
preference.



In October 20, 2016,
we filed an amendment to our articles of incorporation to effect a four-to-one reverse stock split which reduced the number of
our outstanding common shares from 10,510,741 to 2,627,674 shares (adjustments were made based on fractional shares).



Item 15.  Controls and Procedures



(a) Disclosure Controls and Procedures



Management, including our chief executive
officer and chief financial officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange
Act) as of the end of the period covered by this annual report on Form 20-F. Disclosure controls and procedures are defined under
SEC rules as controls and other procedures that are designed to ensure that information required to be disclosed by a company
in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within required time periods. Disclosure controls and procedures include controls and procedures designed to ensure that information
is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.



110







There are inherent limitations to the
effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention
or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives.



Based upon that evaluation, our chief
executive officer and chief financial officer has concluded that our disclosure controls and procedures are effective as of the
evaluation date.



(b) Management’s Annual Report
on Internal Control over Financial Reporting



Management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange
Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s
chief executive officer and chief financial officer to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with
IFRS as issued by the IASB.



Management has conducted an assessment
of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission of 2013. Based
on this assessment, management has determined that the Company’s internal control over financial reporting as of December
31, 2016 is effective.



(c)  Attestation Report
of the Registered Public Accounting Firm



This annual report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to
the rules of the SEC that permit the Company to provide only management’s report in this annual report on Form 20-F.



(d) Changes in Internal Control
over Financial Reporting



None.



Inherent Limitations on Effectiveness
of Controls



Our management, including our chief executive
officer and our chief financial officer, do not expect that our disclosure controls or our internal control over financial reporting
will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system’s objectives will be met. Further, because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or
mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls
may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.



Item 16A.  Audit Committee
Financial Expert



Our board of directors has determined
that Ioannis Kazantzidis is our audit committee financial expert and he is considered to be “independent” according
to the SEC and Nasdaq rules.



Item 16B.  Code of Ethics



We have adopted a code of ethics that
applies to our directors, officers and employees. Our code of ethics is posted on our website and is available upon written request
by our shareholders at no cost to Globus Shipmanagement Corp., 128 Vouliagmenis Avenue, 3rd Floor, 166 74 Glyfada, Athens, Greece.
We intend to satisfy any disclosure requirements regarding any amendment to, or waiver from, a provision of this Code of Ethics
by posting such information on our website.



111







Item 16C.  Principal Accountant
Fees and Services



Ernst & Young (Hellas) Certified Auditors
Accountants S.A., an independent registered public accounting firm, has audited our annual financial statements acting as our
independent auditor for the fiscal years ended December 31, 2016 and 2015. This table below sets forth the total amounts billed
and accrued for Ernst & Young services and breaks down the amounts by category of services:



|                   |  | 2016 |         |  | 2015 |  
|------------------ |  | ---- | ------- |  | ---- | -
|                   |  |      |         |  |      |  
|Audit Fees         |  | $    | 111,000 |  |      | $
|Audit-Related Fees |  |      | -       |  |      |  
|Tax Fees           |  |      | -       |  |      |  
|All Other Fees     |  | $    | 4,500   |  |      | $
|                   |  |      |         |  |      |  
|Total              |  | $    | 115,500 |  |      | $



Audit fees for the years ended December
31, 2016 and 2015 were paid in Euros, and we assume an exchange rate of 0.8997€/$ and 0.8929€/$ for 2016 and 2015, respectively.



Audit fees represent compensation for
professional services rendered for the audit of the consolidated financial statements and for the review of the quarterly financial
information as well as services in connection with the registration statements and related consents and comfort letters and any
other audit services required for SEC or other regulatory filings.



The Audit Committee is responsible for
the appointment, replacement, compensation, evaluation and oversight of the work of the independent auditors. As part of this
responsibility, the Audit Committee pre-approves the audit and non-audit services performed by the independent auditors in order
to assure that they do not impair the auditor’s independence from the Company. The Audit Committee has adopted a policy
which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditors
may be pre-approved.



Item 16D.  Exemptions from
the Listing Standards for Audit Committees



Our audit committee is comprised of two
independent members of our board of directors. Otherwise, our Audit Committee conforms to each other requirement applicable to
audit committees as required by the applicable corporate governance standards of Nasdaq.



Item 16E.  Purchases of Equity
Securities by the Issuer and Affiliated Purchasers



None.



Item 16F.  Change in Registrant’s
Certifying Accountant



None.



Item 16G.  Corporate Governance



In lieu of obtaining an independent review
of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction
will be permitted if: (i) the material facts as to such director’s interest in such contract or transaction and as to any
such common directorship, officership or financial interest are disclosed in good faith or known to the board or committee, and
the board or committee approves such contract or transaction by a vote sufficient for such purpose without counting the vote of
such interested director, or, if the votes of the disinterested directors are insufficient to constitute an act of the board,
by unanimous vote of the disinterested directors; or (ii) if the material facts as to such director’s interest in such contract
or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known
to the shareholders entitled to vote thereon, and such contract or transaction is approved by vote of such shareholders. Article
VI of our articles of incorporation further limit our ability to enter into business transactions with interested shareholders.



112







As a foreign private issuer, we are not
required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands
law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting.
This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition,
our bylaws provide that certain shareholders must give us advance notice to properly introduce any business at a meeting of the
shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.



While a number of the Nasdaq’s corporate
governance standards do not apply to us as a foreign private issuer, we intend to comply with a number of those rules. The practices
that we will follow in lieu of Nasdaq’s corporate governance rules are as follows:



| | Ø | in lieu of a nomination committee and remuneration committee comprised entirely of independent
    directors, our nomination and remuneration committees are and will be comprised of a majority of independent directors. Each
    of these committees will be comprised of a minimum of two individuals;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                           
| | Ø | in lieu of holding regularly scheduled meetings of the board of directors at which only independent
    directors are present, we will not be holding such regularly scheduled meetings;                                                                                                                  



| | Ø | in lieu of a board of directors that is comprised by a majority of independent directors,
    our board of directors is not comprised of a majority of independent directors;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | in lieu of an audit committee comprised of three independent directors, our audit committee
    has two members;                                                                                                     
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                      
| | Ø | in lieu of having a remuneration committee with the authorities and responsibilities set forth
    in the Nasdaq rules, our remuneration committee is not required to have such authorities and responsibilities; and



| | Ø | in lieu of obtaining shareholder approval prior to the issuance of securities (including adoption
    of any equity incentive plan), we will comply with provisions of the BCA, which allows the board of directors to approve all
    share issuances.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 16H.  Mining Safety
Disclosure



Not Applicable.



PART III



Item 17.  Financial Statements



See Item 18.



Item 18.  Financial Statements



The following consolidated financial statements
beginning on page F-1 are filed as a part of this annual report on Form 20-F.



Item 19.  Exhibits



|1.1 | Articles
    of Incorporation of Globus Maritime Limited (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to Globus Maritime
    Limited’s Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November 24, 2010)                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                         
|1.2 | Bylaws
    of Globus Maritime Limited (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to Globus Maritime Limited’s
    Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November 24, 2010)                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                         
|1.3 | Certificate
                                       of Designation for Series A Preferred Stock of Globus Maritime Limited (incorporated by
                                       reference to Exhibit 1.3 to Globus Maritime Limited’s Annual Report on Form 20-F
                                       (Reg. No. 001- 34985) filed on April 27, 2012)



113







|1.4* | Articles of Amendment of Globus Maritime Limited dated October 17, 2016                                                                                                                                                                                                              
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                      
|4.1  | Credit
    Facility between Credit Suisse and Global Maritime Limited, as supplemented (incorporated by reference to Exhibit 10.1 to
    Globus Maritime Limited’s Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November 22, 2010)                              
|     |                                                                                                                                                                                                                                                                                      
|4.2  | Loan
    Agreement between Deutsche Schiffsbank Aktiengesellschaft and Kelty Marine Ltd. (incorporated by reference to Exhibit 10.2
    to Globus Maritime Limited’s Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November 22, 2010)                            
|     |                                                                                                                                                                                                                                                                                      
|4.3  | Business
    Opportunities Agreement between Globus Maritime Limited and Georgios Feidakis (incorporated by reference to Exhibit 10.4 to
    Globus Maritime Limited’s Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November 22, 2010)                          
|     |                                                                                                                                                                                                                                                                                      
|4.4  | Registration
    Rights Agreement between Globus Maritime Limited, Firment Trading Limited and Kim Holdings S.A. (incorporated by reference
    to Exhibit 10.5 to Globus Maritime Limited’s Registration Statement on Form F-1 (Reg. No. 333-170755) filed on November
    22, 2010)
|     |                                                                                                                                                                                                                                                                                      
|4.5  | Sixth Supplemental Agreement to Facility Agreement, dated May 5, 2011 (incorporated by reference to Exhibit 99.1 to Globus Maritime Limited’s Current Report on Form 6-K (Reg. No. 001-34985) filed on May 9, 2011)                                                                  
|     |                                                                                                                                                                                                                                                                                      
|4.6  | Equity
    Incentive Plan of Globus Maritime Limited (incorporated by reference to Exhibit 4.6 to Globus Maritime Limited’s Annual
    Report on Form 20-F (Reg. No. 001-34985) filed on April 29, 2016)                                                                             
|     |                                                                                                                                                                                                                                                                                      
|4.7* | Globus Maritime Limited 2012 Equity Incentive
Plan amended August 12, 2016 and April 9, 2017.                                                                                                                                                                                        



|4.8  | Loan
    Agreement among DVB Bank SE, Artful Shipping S.A. and Longevity Maritime Limited (previously filed as Exhibit 10.10 to Amendment
    No. 3 to the Registration Statement on Form F-1 (Reg. No. 333-174290) filed on June 22, 2011)                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                          
|4.9  | Supplemental
    Agreement to Loan Agreement among DVB Bank SE, Artful Shipping S.A. and Longevity Maritime Limited, dated March 1, 2012 (incorporated
    by reference to Exhibit 4.10 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April
    30, 2013)        
|     |                                                                                                                                                                                                                                                                                                          
|4.10 | Second
    Supplemental Agreement to Loan Agreement among DVB Bank SE, Artful Shipping S.A. and Longevity Maritime Limited, dated April
    10, 2013 (incorporated by reference to Exhibit 4.11 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No.
    001-34985) filed on April 30, 2013)
|     |                                                                                                                                                                                                                                                                                                          
|4.11 | Seventh
    Supplemental Agreement to Facility Agreement, dated March 26, 2013 (incorporated by reference to Exhibit 4.12 to Globus Maritime
    Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 30, 2013)                                                                      



114







|4.12 | Revolving
    Credit Facility between Globus Maritime Limited and Firment Trading Limited, dated December 16, 2013 (incorporated by reference
    to Exhibit 4.11 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 29, 2014)                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.13 | Third
    Supplemental Agreement to Loan Agreement among DVB Bank SE, Artful Shipping S.A., Longevity Maritime Limited, Globus Maritime
    Limited and Globus Shipmanagement Corp. dated February 20, 2015 (incorporated by reference to Exhibit 4.12 to Globus Maritime
    Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 30, 2015)                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.14 | Eighth
    Supplemental Agreement to Facility Agreement, dated August 14, 2014 (incorporated by reference to Exhibit 4.13 to Globus Maritime
    Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 30, 2015)                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.15 | Ninth
    Supplemental Agreement to Facility Agreement, dated February 25, 2015 (incorporated by reference to Exhibit 4.14 to Globus
    Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 30, 2015)                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.16 | Facility
    Agreement among Devocean Maritime Ltd., Domina Maritime Ltd., Dulac Maritime S.A., HSH Nordbank AG and Globus Maritime Limited,
    dated February 27, 2015 (incorporated by reference to Exhibit 4.15 to Globus Maritime Limited’s Annual Report on Form
    20-F (Reg. No. 001-34985) filed on April 30, 2015)                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.17 | First
    Supplemental Agreement to Revolving Credit Facility between Globus Maritime Limited and Firment Trading Limited, dated April
    28, 2015 (incorporated by reference to Exhibit 4.16 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No.
    001-34985) filed on April 30, 2015)                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.18 | Second
    Supplemental Agreement to the Revolving Credit Facility Agreement between Globus Maritime Limited and Firment Trading Limited
    dated December 29, 2015 (incorporated by reference to Exhibit 4.17 to Globus Maritime Limited’s Annual Report on Form
    20-F (Reg. No. 001-34985) filed on April 29, 2016)                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.19 | Third Supplemental Agreement – Assignment to the Revolving Credit Facility Agreement between Globus Maritime Limited, Firment Trading Limited, a Cypriot company, and Firment Trading Limited, a Marshall Islands corporation, dated December 31, 2015 (incorporated by reference to Exhibit 4.18 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 29, 2016)
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.20 | Agreement for a Revolving Credit Facility dated January 12, 2016 between Globus Maritime Limited and Silaner Investments Limited  (incorporated by reference to Exhibit 4.19 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 29, 2016)                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.21 | Settlement
    Agreement among Commerzbank Aktiengesellschaft, Kelty Marine Ltd. and Globus Maritime Limited dated March 21, 2016  (incorporated
    by reference to Exhibit 4.20 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April
    29, 2016)                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                        
|4.22 | Fourth
    Supplemental Agreement to Loan Agreement among DVB Bank SE, Artful Shipping S.A., Longevity Maritime Limited, Globus Maritime
    Limited and Globus Shipmanagement Corp. dated April 18, 2016  (incorporated by reference to Exhibit 4.21 to Globus
    Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on April 29, 2016)                                        



115







|4.23*      | Private Sublease Agreement dated January 2, 2016 between Globus Maritime Limited and Cyberonica S.A.                                                                                                                                                                                                   
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           |                                                                                                                                                                                                                                                                                                        
|4.24       | Share
    and Warrant Purchase Agreement dated February 8, 2017 between Globus Maritime Limited and the Purchasers listed on Schedule
    A thereto (incorporated by reference to Exhibit 10.1 to Globus Maritime Limited’s Report on Form 6-K (Reg. No. 001-34985)
     furnished on February 9, 2016)
|           |                                                                                                                                                                                                                                                                                                        
|4.25       | Registration
    Rights Agreement between Globus Maritime Limited and the Purchasers dated February 9, 2017 (incorporated by reference to Exhibit
    10.2 to Globus Maritime Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February 9, 2016)                                        
|           |                                                                                                                                                                                                                                                                                                        
|4.26       | Amendment
    to Loan Agreement dated February 8, 2017 between Globus Maritime Limited and Firment Trading Limited (incorporated by reference
    to Exhibit 10.3 to Globus Maritime Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February 9,
    2016)                             
|           |                                                                                                                                                                                                                                                                                                        
|4.27       | Amendment
    to Loan Agreement dated February 8, 2017 between Globus Maritime Limited and Silaner Investments Limited (incorporated by
    reference to Exhibit 10.4 to Globus Maritime Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February
    9, 2016)                         
|           |                                                                                                                                                                                                                                                                                                        
|4.28       | Form
    of Warrant issued to each Purchaser (incorporated by reference to Exhibit 10.5 to Globus Maritime Limited’s Report on
    Form 6-K (Reg. No. 001-34985)  furnished on February 9, 2016)                                                                                                       
|           |                                                                                                                                                                                                                                                                                                        
|4.29       | Warrant
    dated February 8, 2017 issued to nominee of Firment Trading Limited (incorporated by reference to Exhibit 10.6 to Globus Maritime
    Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February 9, 2016)                                                                    
|           |                                                                                                                                                                                                                                                                                                        
|4.30       | Warrant
    dated February 8, 2017 issued to nominee of Silaner Investments Limited (incorporated by reference to Exhibit 10.7 to Globus
    Maritime Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February 9, 2016)                                                                
|           |                                                                                                                                                                                                                                                                                                        
|4.31       | Schedule
    to Exhibit 10.5 (Regarding Material Differences in Issued Warrants) (incorporated by reference to Exhibit 10.8 to Globus Maritime
    Limited’s Report on Form 6-K (Reg. No. 001-34985)  furnished on February 9, 2016)                                                                   
|           |                                                                                                                                                                                                                                                                                                        
|4.32*      | Supplemental Agreement relating to a loan of up to US$30,000,000 to Devocean Maritime Ltd., Domina Maritime Ltd., and Dulac Maritime S.A., arranged by HSH Nordbank AG, with HSH Nordbank AG as Agent, HSH Nordbank AG as Security Agent, guaranteed by Globus Maritime Limited, dated December 5, 2016
|           |                                                                                                                                                                                                                                                                                                        
|8.1        | Subsidiaries
    of Globus Maritime Limited (incorporated by reference to Exhibit 4.20 to Globus Maritime Limited’s Annual Report on
    Form 20-F (Reg. No. 001-34985) filed on April 29, 2016)                                                                                                       
|           |                                                                                                                                                                                                                                                                                                        
|11.1       | Code of Ethics & Conduct of Globus Maritime Limited (incorporated by reference to Exhibit 11.1 to Globus Maritime Limited’s Annual Report on Form 20-F (Reg. No. 001-34985) filed on March 28, 2011)                                                                                                   
|           |                                                                                                                                                                                                                                                                                                        
|12.1/12.2* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the President, Chief Executive Officer and Chief Financial Officer                                                                                                                                                          
|           |                                                                                                                                                                                                                                                                                                        
|13.1/13.2* | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the President, Chief Executive Officer and Chief Financial Officer                                                                                                          



* Filed herewith.



116







SIGNATURES



The registrant hereby
certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.



| | GLOBUS MARITIME LIMITED
| | -----------------------
| |                        
| | By:                    
| |                        
| |                        
| |                        
| |                        



Date: April 11, 2017



117









GLOBUS MARITIME LIMITED



CONSOLIDATED FINANCIAL STATEMENTS



FOR THE YEAR ENDED DECEMBER 31, 2016











INDEX TO THE CONSOLIDATED FINANCIAL
STATEMENTS



|Report of Independent Registered Public Accounting Firm | F-2        
|------------------------------------------------------- | -----------
|                                                        |            
|Consolidated Statement of Comprehensive Loss/Income     | F-3        
|                                                        |            
|Consolidated Statement of Financial Position            | F-4        
|                                                        |            
|Consolidated Statement of Changes in Equity             | F-5        
|                                                        |            
|Consolidated Statement of Cash Flows                    | F-6        
|                                                        |            
|Notes to the Consolidated Financial Statements          | F-7 to F-37



F-1











REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



The Board of Directors and Stockholders of Globus Maritime
Limited



We have audited the accompanying consolidated
statements of financial position of Globus Maritime Limited (the “Company”) as of December 31, 2016 and 2015, and
the related consolidated statements of comprehensive loss/income, changes in equity and cash flows for each of the three years
in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the consolidated financial position of Globus Maritime Limited at
December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the
period ended December 31, 2016, in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board (IASB).



/s/ Ernst & Young (Hellas)
Certified Auditors-Accountants S.A.

Athens, Greece

April 11, 2017



F-2







GLOBUS MARITIME LIMITED

CONSOLIDATED STATEMENT
OF COMPREHENSIVE LOSS/INCOME

For the year ended 31
December 2016

(Expressed in thousands
of U.S. Dollars, except per share data)



|                                                               |  | Notes |    |  | 2016 |  |        | 2015 |  |  | 2014    |  
|-------------------------------------------------------------- |  | ----- | -- |  | ---- |  | ------ | ---- |  |  | ------- | -
|REVENUE:                                                       |  |       |    |  |      |  |        |      |  |  |         |  
|Voyage revenues                                                |  |       |    |  |      |  | 8,740  |      |  |  | 12,715  |  
|Management & consulting fee income                             |  |       | 4  |  |      |  | 278    |      |  |  | -       |  
|Total Revenues                                                 |  |       |    |  |      |  | 9,018  |      |  |  | 12,715  |  
|                                                               |  |       |    |  |      |  |        |      |  |  |         |  
|EXPENSES & OTHER OPERATING INCOME:                             |  |       |    |  |      |  |        |      |  |  |         |  
|Voyage expenses                                                |  |       | 14 |  |      |  | (1,271 | )    |  |  | (2,384  | )
|Vessel operating expenses                                      |  |       | 14 |  |      |  | (8,688 | )    |  |  | (10,321 | )
|Depreciation                                                   |  |       | 5  |  |      |  | (5,014 | )    |  |  | (6,085  | )
|Depreciation of dry docking costs                              |  |       | 5  |  |      |  | (1,005 | )    |  |  | (1,062  | )
|Amortization of fair value of time charter attached to vessels |  |       | 5  |  |      |  | -      |      |  |  | (41     | )
|Administrative expenses                                        |  |       | 15 |  |      |  | (2,094 | )    |  |  | (1,751  | )
|Administrative expenses payable to related parties             |  |       | 4  |  |      |  | (351   | )    |  |  | (465    | )
|Share-based payments                                           |  |       | 13 |  |      |  | (50    | )    |  |  | (60     | )
|Impairment Loss/(Reversal of impairment)                       |  |       | 5  |  |      |  | -      |      |  |  | (20,144 | )
|Gain from sale of subsidiary                                   |  |       | 12 |  |      |  | 2,257  |      |  |  | -       |  
|Other (expenses)/income, net                                   |  |       |    |  |      |  | (30    | )    |  |  | (110    | )
|Operating (loss)/profit                                        |  |       |    |  |      |  | (7,228 | )    |  |  | (29,708 | )
|                                                               |  |       |    |  |      |  |        |      |  |  |         |  
|Interest income                                                |  |       |    |  |      |  | 5      |      |  |  | 8       |  
|Interest expense and finance costs                             |  |       | 16 |  |      |  | (2,676 | )    |  |  | (2,783  | )
|Foreign exchange gains/(losses), net                           |  |       |    |  |      |  | 74     |      |  |  | 87      |  
|                                                               |  |       |    |  |      |  |        |      |  |  |         |  
|TOTAL (LOSS)/PROFIT FOR THE YEAR                               |  |       |    |  |      |  | (9,825 | )    |  |  | (32,396 | )
|Other Comprehensive Income                                     |  |       |    |  |      |  | -      |      |  |  | -       |  
|TOTAL COMPREHENSIVE (LOSS)/INCOME
    FOR THE YEAR             |  |       |    |  |      |  | (9,825 | )    |  |  | (32,396 | )
|                                                               |  |       |    |  |      |  |        |      |  |  |         |  
|(Loss)/earnings per share (U.S.$):                             |  |       |    |  |      |  |        |      |  |  |         |  
|- Basic & Diluted (loss)/earnings per share  for the year      |  |       | 11 |  |      |  | (3.77  | )    |  |  | (12.80  | )



The accompanying notes form an integral
part of these financial statements.



F-3







GLOBUS MARITIME LIMITED

CONSOLIDATED STATEMENT
OF FINANCIAL POSITION

As at 31 December 2016

(Expressed in thousands
of U.S. Dollars, except per share data)



|                                             |  | Notes |      |  | 2016 |  |         | 2015 | 
|-------------------------------------------- |  | ----- | ---- |  | ---- |  | ------- | ---- | 
|                                             |  |       |      |  |      |  |         |      | 
|ASSETS                                       |  |       |      |  |      |  |         |      | 
|                                             |  |       |      |  |      |  |         |      | 
|NON-CURRENT ASSETS                           |  |       |      |  |      |  |         |      | 
|Vessels, net                                 |  |       | 5    |  |      |  | 91,792  |      | 
|Office furniture and equipment               |  |       |      |  |      |  | 45      |      | 
|Other non-current assets                     |  |       |      |  |      |  | 10      |      | 
|                                             |  |       |      |  |      |  | 91,847  |      | 
|CURRENT ASSETS                               |  |       |      |  |      |  |         |      | 
|Trade receivables, net                       |  |       |      |  |      |  | 243     |      | 
|Inventories                                  |  |       | 6    |  |      |  | 516     |      | 
|Prepayments and other assets                 |  |       | 7    |  |      |  | 1,017   |      | 
|Restricted cash                              |  |       | 3    |  |      |  | 210     |      | 
|Cash and cash equivalents                    |  |       | 3    |  |      |  | 163     |      | 
|                                             |  |       |      |  |      |  | 2,149   |      | 
|TOTAL ASSETS                                 |  |       |      |  |      |  | 93,996  |      | 
|                                             |  |       |      |  |      |  |         |      | 
|EQUITY AND LIABILITIES                       |  |       |      |  |      |  |         |      | 
|                                             |  |       |      |  |      |  |         |      | 
|EQUITY                                       |  |       |      |  |      |  |         |      | 
|Issued Share capital                         |  |       | 10   |  |      |  | 10      |      | 
|Share premium                                |  |       | 10   |  |      |  | 110,004 |      | 
|Accumulated deficit                          |  |       |      |  |      |  | (89,254 | )    | 
|Total equity                                 |  |       |      |  |      |  | 20,760  |      | 
|NON-CURRENT LIABILITIES                      |  |       |      |  |      |  |         |      | 
|Long-term borrowings, net of current portion |  |       | 4,12 |  |      |  | 42,022  |      | 
|Provision for staff retirement indemnities   |  |       |      |  |      |  | 78      |      | 
|                                             |  |       |      |  |      |  | 42,100  |      | 
|CURRENT LIABILITIES                          |  |       |      |  |      |  |         |      | 
|Current portion of long-term borrowings      |  |       | 12   |  |      |  | 23,550  |      | 
|Trade accounts payable                       |  |       | 8    |  |      |  | 4,757   |      | 
|Accrued liabilities and other payables       |  |       | 9    |  |      |  | 2,609   |      | 
|Deferred revenue                             |  |       |      |  |      |  | 220     |      | 
|                                             |  |       |      |  |      |  | 31,136  |      | 
|TOTAL LIABILITIES                            |  |       |      |  |      |  | 73,236  |      | 
|TOTAL EQUITY AND LIABILITIES                 |  |       |      |  |      |  | 93,996  |      | 



The accompanying notes form an integral
part of these financial statements.



F-4







GLOBUS MARITIME LIMITED

CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY

For the year ended 31
December 2016

(Expressed in thousands
of U.S. Dollars, except share and per share data)



|                               |  | Issued share |    |  | Share     |  |         |                       |  |  |         |  
|------------------------------ |  | ------------ | -- |  | --------- |  | ------- | --------------------- |  |  | ------- | -
|                               |  | Capital      |    |  | Premium   |  |         |                       |  |  | Total   |  
|                               |  | (note 10)    |    |  | (note 10) |  |         | (Accumulated Deficit) |  |  | Equity  |  
|As at January 1, 2014          |  |              | 10 |  |           |  | 109,834 |                       |  |  | (49,504 | )
|Profit for the year            |  |              | -  |  |           |  | -       |                       |  |  | 3,212   |  
|Other comprehensive income     |  |              | -  |  |           |  | -       |                       |  |  | -       |  
|Total comprehensive income     |  |              | -  |  |           |  | -       |                       |  |  | 3,212   |  
|Share-based payments (note 13) |  |              | -  |  |           |  | 60      |                       |  |  | -       |  
|Dividends paid (note 17)       |  |              | -  |  |           |  | -       |                       |  |  | (293    | )
|As at December 31, 2014        |  |              | 10 |  |           |  | 109,894 |                       |  |  | (46,585 | )
|Loss for the year              |  |              | -  |  |           |  | -       |                       |  |  | (32,396 | )
|Other comprehensive income     |  |              | -  |  |           |  | -       |                       |  |  | -       |  
|Total comprehensive loss       |  |              | -  |  |           |  | -       |                       |  |  | (32,396 | )
|Share-based payments (note 13) |  |              | -  |  |           |  | 60      |                       |  |  | -       |  
|Dividends paid (note 17)       |  |              | -  |  |           |  | -       |                       |  |  | (448    | )
|As at December 31, 2015        |  |              | 10 |  |           |  | 109,954 |                       |  |  | (79,429 | )
|Loss for the year              |  |              | -  |  |           |  | -       |                       |  |  | (9,825  | )
|Other comprehensive income     |  |              | -  |  |           |  | -       |                       |  |  | -       |  
|Total comprehensive loss       |  |              | -  |  |           |  | -       |                       |  |  | (9,825  | )
|Share-based payments (note 13) |  |              | -  |  |           |  | 50      |                       |  |  | -       |  
|As at December 31, 2016        |  |              | 10 |  |           |  | 110,004 |                       |  |  | (89,254 | )



The accompanying notes form an integral
part of these financial statements.



F-5







GLOBUS MARITIME LIMITED

CONSOLIDATED STATEMENT
OF CASH FLOWS

For the year ended 31
December 2016

(Expressed in thousands
of U.S. Dollars)



|                                                               |  | Notes |      |  | 2016 |  |        | 2015 |  |  | 2014    |  
|-------------------------------------------------------------- |  | ----- | ---- |  | ---- |  | ------ | ---- |  |  | ------- | -
|Operating activities                                           |  |       |      |  |      |  |        |      |  |  |         |  
|Loss for the year                                              |  |       |      |  |      |  | (9,825 | )    |  |  | (32,396 | )
|Adjustments for:                                               |  |       |      |  |      |  |        |      |  |  |         |  
|Depreciation                                                   |  |       | 5    |  |      |  | 5,014  |      |  |  | 6,085   |  
|Depreciation of deferred dry docking costs                     |  |       | 5    |  |      |  | 1,005  |      |  |  | 1,062   |  
|Amortization of fair value of time charter attached to vessels |  |       | 5    |  |      |  | -      |      |  |  | 41      |  
|Payment of deferred dry docking costs                          |  |       | 5    |  |      |  | (478   | )    |  |  | (983    | )
|Impairment loss/(Reversal of impairment)                       |  |       | 5    |  |      |  | -      |      |  |  | 20,144  |  
|Gain from sale of subsidiary                                   |  |       | 12   |  |      |  | (2,257 | )    |  |  | -       |  
|Provision for staff retirement indemnities                     |  |       |      |  |      |  | 5      |      |  |  | 5       |  
|Interest expense and finance costs                             |  |       | 16   |  |      |  | 2,676  |      |  |  | 2,783   |  
|Interest income                                                |  |       |      |  |      |  | (5     | )    |  |  | (8      | )
|Foreign exchange gains, net                                    |  |       |      |  |      |  | (58    | )    |  |  | (28     | )
|Share based payment                                            |  |       | 13   |  |      |  | 50     |      |  |  | 60      |  
|(Increase)/decrease in:                                        |  |       |      |  |      |  |        |      |  |  |         |  
|Trade receivables, net                                         |  |       |      |  |      |  | (270   | )    |  |  | 489     |  
|Inventories                                                    |  |       |      |  |      |  | (161   | )    |  |  | (12     | )
|Prepayments and other assets                                   |  |       |      |  |      |  | (232   | )    |  |  | 1,483   |  
|Increase/(decrease) in:                                        |  |       |      |  |      |  |        |      |  |  |         |  
|Trade accounts payable                                         |  |       |      |  |      |  | 746    |      |  |  | 1,404   |  
|Accrued liabilities and other payables                         |  |       |      |  |      |  | 141    |      |  |  | (54     | )
|Deferred revenue                                               |  |       |      |  |      |  | 49     |      |  |  | (135    | )
|Net cash (used in)/ generated from operating activities        |  |       |      |  |      |  | (3,600 | )    |  |  | (60     | )
|Cash flows from investing activities:                          |  |       |      |  |      |  |        |      |  |  |         |  
|Net Proceeds from sale of vessel/subsidiary                    |  |       |      |  |      |  | 374    |      |  |  | 5,348   |  
|Purchases of office furniture and equipment                    |  |       |      |  |      |  | (19    | )    |  |  | (5      | )
|Interest received                                              |  |       |      |  |      |  | 7      |      |  |  | 8       |  
|Net cash (used in)/ generated from investing activities        |  |       |      |  |      |  | 362    |      |  |  | 5,351   |  
|Cash flows from financing activities:                          |  |       |      |  |      |  |        |      |  |  |         |  
|Proceeds from loans                                            |  |       | 12,4 |  |      |  | 5,950  |      |  |  | 39,505  |  
|Repayment of long-term debt                                    |  |       |      |  |      |  | (3,100 | )    |  |  | (45,506 | )
|Pledged bank deposits                                          |  |       | 3    |  |      |  | 290    |      |  |  | 500     |  
|Dividends paid                                                 |  |       | 17   |  |      |  | (14    | )    |  |  | (505    | )
|Interest paid                                                  |  |       |      |  |      |  | (1,730 | )    |  |  | (2,363  | )
|Net cash (used in)/ generated from financing activities        |  |       |      |  |      |  | 1,396  |      |  |  | (8,369  | )
|Net (decrease)/increase in cash and cash equivalents           |  |       |      |  |      |  | (1,842 | )    |  |  | (3,078  | )
|Foreign exchange gains on cash and bank deposits               |  |       |      |  |      |  | -      |      |  |  | -       |  
|Cash and cash equivalents at the beginning of the year         |  |       | 3    |  |      |  | 2,005  |      |  |  | 5,083   |  
|Cash and cash equivalents at the end of the year               |  |       | 3    |  |      |  | 163    |      |  |  | 2,005   |  



The accompanying notes form an integral
part of these financial statements.



F-6







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 1. | Basis of presentation and general information
| | -- | ---------------------------------------------



The accompanying
consolidated financial statements include the financial statements of Globus Maritime Limited (“Globus”)
and its wholly owned subsidiaries (collectively the “Company”). Globus was formed on July 26, 2006 under the laws
of Jersey. On June 1, 2007, Globus concluded its initial public offering in the United Kingdom and its shares were admitted for
trading on the Alternative Investment Market (“AIM”). On November 24, 2010 Globus was redomiciled to the Marshall
Islands and its shares were admitted for trading in the United States (NASDAQ Global Market) under the Securities Act of 1933,
as amended. On November 26, 2010 Globus shares were effectively delisted from AIM.



The address
of the registered office of Globus is: Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.



The principal
business of the Company is the ownership and operation of a fleet of dry bulk motor vessels (“m/v”), providing maritime
services for the transportation of dry cargo products on a worldwide basis. The Company conducts its operations through its vessel
owning subsidiaries.



The operations
of the vessels are managed by Globus Shipmanagement Corp. (the “Manager”), a wholly owned Marshall Islands corporation.
The Manager has an office in Greece, located at 128 Vouliagmenis Avenue, 166 74 Glyfada, Greece and provides the commercial, technical,
cash management and accounting services necessary for the operation of the fleet in exchange for a management fee. The management
fee is eliminated on consolidation. The consolidated financial statements include the financial statements of Globus and its subsidiaries
listed below, all wholly owned by Globus as of December 31, 2016:



|Company                                                                     |  | Country
    ofIncorporation |  | Vessel
    DeliveryDate |  | Vessel
    Owned                       
|--------------------------------------------------------------------------- |  | --------------------------- |  | ----------------------- |  | ---------------------------------------
|                                                                            |  |                             |  |                         |  |                                        
|Globus
    Shipmanagement Corp.                                             |  | Marshall
    Islands        |  | July
    26, 2006       |  | Management
    Co.                     
|Devocean Maritime Ltd.                                                      |  | Marshall Islands            |  | December 18, 2007       |  | m/v River Globe                        
|Elysium Maritime Limited
    (The company was dissolved on August 24, 2016) |  | Marshall Islands            |  | December 18, 2007       |  | m/v Tiara Globe (Sold
    in July 2015)
|Domina Maritime Ltd.                                                        |  | Marshall Islands            |  | May 19, 2010            |  | m/v Sky Globe                          
|Dulac Maritime S.A.                                                         |  | Marshall Islands            |  | May 25, 2010            |  | m/v Star Globe                         
|Artful Shipholding
    S.A.                                                 |  | Marshall Islands            |  | June 22, 2011           |  | m/v Moon Globe                         
|Longevity Maritime
    Limited                                              |  | Malta                       |  | September 15, 2011      |  | m/v Sun Globe                          



F-7







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 1. | Basis of presentation and
                                         general information (continued)
| | -- | --------------------------------------------------------------------------------------------------



The consolidated
financial statements as of December 31, 2016 and 2015 and for the three years in the period ended December 31, 2016, were approved
for issuance by the Board of Directors on April 11, 2017.



| | 2. | Basis
                                         of Preparation and Significant Accounting Policies
| | -- | -------------------------------------------------------------------------------------------------



| | 2.1 | Basis of Preparation:The consolidated financial statements have been prepared on a historical cost basis.
                                         The consolidated financial statements are presented in U.S. dollars and all values are
                                         rounded to the nearest thousand ($ 000s) except when otherwise indicated.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Going concern basis of
accounting:



The consolidated financial
statements have been prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation
for at least twelve months from its balance sheet date and will be able to realize its assets and discharge its liabilities and
commitments in the normal course of business.



As of December 31, 2016, the
Company reported a working capital deficit (which is current assets minus, current liabilities) of $ 28,987.



In 2017, the Company agreed
with its lenders to amend its loan agreements with HSH Nordbank AG and DVB Bank SE. All covenants included in these agreements
were either relaxed or waived up to April 2018 while certain scheduled instalments were deferred to 2018 and 2019 (see Note 12).
On February 8, 2017, the Company entered into a Share and Warrant Purchase Agreement pursuant to which the Firment and Silaner
Credit Facilities were fully repaid (see Note 4). Subsequent to this agreement the Company has secured adequate liquidity to service
its debt and finance its operations until at least the first quarter of 2018.



Statement
of Compliance:These consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).



Basis
of Consolidation:The consolidated financial statements comprise the financial statements of Globus and its subsidiaries
listed in note 1. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies.



All inter-company
balances and transactions have been eliminated upon consolidation. Subsidiaries are fully consolidated from the date on which
control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Company.



F-8







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2. | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | -- | -------------------------------------------------------------------------------------------------------------



| | 2.2 | Standards amendments and
                                         interpretations:
| | --- | ----------------------------------------------------------------------------------



The accounting policies adopted
are consistent with those of previous financial year except for the following amended IFRS which have been adopted by the Company
as of January 1, 2016.



| | • | IAS 1: Disclosure
                                         Initiative (Amendment)
| | - | ---------------------------------------------------------------------------------



The amendments to IAS 1 Presentation
of Financial Statements further encourage companies to apply professional judgment in determining what information to disclose
and how to structure it in their financial statements. The amendments are effective for annual periods beginning on or after 1
January 2016. The narrow-focus amendments to IAS clarify, rather than significantly change, existing IAS 1 requirements. The amendments
relate to materiality, order of the notes, subtotals and disaggregation, accounting policies and presentation of items of other
comprehensive income (OCI) arising from equity accounted Investments. Management has made not made use of this amendment.



| | • | IAS 16 Property, Plant & Equipment
                                         and IAS 38 Intangible assets (Amendment): Clarification of Acceptable Methods of Depreciation
                                         and Amortization.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The amendment is effective
for annual periods beginning on or after 1 January 2016. The amendment provides additional guidance on how the depreciation or
amortization of property, plant and equipment and intangible assets should be calculated. This amendment clarifies the principle
in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets that revenue reflects a pattern of economic benefits that
are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through
use of the asset. As a result, the ratio of revenue generated to total revenue expected to be generated cannot be used to depreciate
property, plant and equipment and may only be used in very limited circumstances to amortize intangible assets. This amendment
has no impact on the financial position or performance of the Company.



| | • | IFRS 11
                                         Joint arrangements (Amendment): Accounting for Acquisitions of Interests in Joint Operations
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  | The amendment
                                         is effective for annual periods beginning on or after 1 January 2016. IFRS 11 addresses
                                         the accounting for interests in joint ventures and joint operations. The amendment adds
                                         new guidance on how to account for the acquisition of an interest in a joint operation
                                         that constitutes a business in accordance with IFRS and specifies the appropriate accounting
                                         treatment for such acquisitions. The Company had no transactions in scope of this amendment.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | IAS 19 Defined
                                         Benefit Plans (Amended): Employee Contributions
| | - | -------------------------------------------------------------------------------------------------------



| |  | The amendment
                                         is effective for annual periods beginning on or after 1 February 2015. The amendment
                                         applies to contributions from employees or third parties to defined benefit plans. The
                                         objective of the amendment is to simplify the accounting for contributions that are independent
                                         of the number of years of employee service, for example, employee contributions that
                                         are calculated according to a fixed percentage of salary. The Company does not have any
                                         plans that fall within the scope of this amendment.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | The IASB has issued the Annual
                                         Improvements to IFRSs 2010 – 2012 Cycle, which is a collection of amendments
                                         to IFRSs. The amendments are effective for annual periods beginning on or after 1 February
                                         2015. None of these had an effect on the Company’s financial statements.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | IFRS
                                         2 Share-based Payment: This improvement amends the definitions of 'vesting condition'
                                         and 'market condition' and adds definitions for 'performance condition' and 'service
                                         condition' (which were previously part of the definition of 'vesting condition').
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IFRS
                                         3 Business combinations: This improvement clarifies that contingent consideration in
                                         a business acquisition that is not classified as equity is subsequently measured at fair
                                         value through profit or loss whether or not it falls within the scope of IFRS 9 Financial
                                         Instruments.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IFRS
                                         8 Operating Segments: This improvement requires an entity to disclose the judgments made
                                         by management in applying the aggregation criteria to operating segments and clarifies
                                         that an entity shall only provide reconciliations of the total of the reportable segments'
                                         assets to the entity's assets if the segment assets are reported regularly.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IFRS
                                         13 Fair Value Measurement: This improvement in the Basis of Conclusion of IFRS 13 clarifies
                                         that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure
                                         short-term receivables and payables with no stated interest rate at their invoice amounts
                                         without discounting if the effect of not discounting is immaterial.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IAS
                                         16 Property Plant & Equipment: The amendment clarifies that when an item of property,
                                         plant and equipment is revalued, the gross carrying amount is adjusted in a manner that
                                         is consistent with the revaluation of the carrying amount.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IAS
                                         24 Related Party Disclosures: The amendment clarifies that an entity providing key management
                                         personnel services to the reporting entity or to the parent of the reporting entity is
                                         a related party of the reporting entity.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IAS
                                         38 Intangible Assets: The amendment clarifies that when an intangible asset is revalued
                                         the gross carrying amount is adjusted in a manner that is consistent with the revaluation
                                         of the carrying amount.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-9







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | • | The IASB has issued the Annual
                                         Improvements to IFRSs 2012 – 2014 Cycle, which is a collection of amendments
                                         to IFRSs. The amendments are effective for annual periods beginning on or after 1 January
                                         2016. None of these had an effect on the Company’s financial statements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | IFRS
                                         5 Non-current Assets Held for Sale and Discontinued Operations: The amendment clarifies
                                         that changing from one of the disposal methods to the other (through sale or through
                                         distribution to the owners) should not be considered to be a new plan of disposal, rather
                                         it is a continuation of the original plan. There is therefore no interruption of the
                                         application of the requirements in IFRS 5. The amendment also clarifies that changing
                                         the disposal method does not change the date of classification.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IFRS
                                         7 Financial Instruments: Disclosures: The amendment clarifies that a servicing contract
                                         that includes a fee can constitute continuing involvement in a financial asset. Also,
                                         the amendment clarifies that the IFRS 7 disclosures relating to the offsetting of financial
                                         assets and financial liabilities are not required in the condensed interim financial
                                         report.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IAS
                                         19 Employee Benefits: The amendment clarifies that market depth of high quality corporate
                                         bonds is assessed based on the currency in which the obligation is denominated, rather
                                         than the country where the obligation is located. When there is no deep market for high
                                         quality corporate bonds in that currency, government bond rates must be used.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | IAS
                                         34 Interim Financial Reporting: The amendment clarifies that the required interim disclosures
                                         must either be in the interim financial statements or incorporated by cross-reference
                                         between the interim financial statements and wherever they are included within the greater
                                         interim financial report (e.g., in the management commentary or risk report). The Board
                                         specified that the other information within the interim financial report must be available
                                         to users on the same terms as the interim financial statements and at the same time.
                                         If users do not have access to the other information in this manner, then the interim
                                         financial report is incomplete.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Standards issued but not yet effective
and not early adopted:



The
standards and interpretations issued, but not yet effective, up to the date of issuance of the Company’s financial statements
are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.



| | · | IFRS
                                         9 Financial Instruments: Classification and Measurement: The standard is effective for
                                         annual periods beginning on or after 1 January 2018, with early application permitted.
                                         The final version of IFRS 9 Financial Instruments reflects all phases of the financial
                                         instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement
                                         and all previous versions of IFRS 9. The standard introduces new requirements for classification
                                         and measurement, impairment, and hedge accounting. The Company is in the process of assessing
                                         the impact of the new standard on the financial position or performance of the Company.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS
                                         15 Revenue from Contracts with Customers: The standard is effective for annual periods
                                         beginning on or after 1 January 2018. IFRS 15 establishes a five-step model that will
                                         apply to revenue earned from a contract with a customer (with limited exceptions), regardless
                                         of the type of revenue transaction or the industry. The standard’s requirements
                                         will also apply to the recognition and measurement of gains and losses on the sale of
                                         some non-financial assets that are not an output of the entity’s ordinary activities
                                         (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures
                                         will be required, including disaggregation of total revenue; information about performance
                                         obligations; changes in contract asset and liability account balances between periods
                                         and key judgments and estimates. The Company is currently assessing the impact of IFRS
                                         15 and plans to adopt the new standard on the required effective date.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS
                                         15: Revenue from Contracts with Customers (Clarifications). The Clarifications apply
                                         for annual periods beginning on or after 1 January 2018 with earlier application permitted.
                                         The objective of the Clarifications is to clarify the IASB’s intentions when developing
                                         the requirements in IFRS 15 Revenue from Contracts with Customers, particularly the accounting
                                         of identifying performance obligations amending the wording of the “separately
                                         identifiable” principle, of principal versus agent considerations including the
                                         assessment of whether an entity is a principal or an agent as well as applications of
                                         control principle and of licensing providing additional guidance for accounting of intellectual
                                         property and royalties. The Clarifications also provide additional practical expedients
                                         for entities that either apply IFRS 15 fully retrospectively or that elect to apply the
                                         modified retrospective approach The Company is currently assessing the impact of these
                                         Clarifications and plans to adopt the new standard on the required effective date.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS
                                         16: Leases
| | - | --------------------------------------------------------

The standard is effective
for annual periods beginning on or after 1 January 2019. IFRS 16 sets out the principles for the recognition, measurement, presentation
and disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’).
The new standard requires lessees to recognize most leases on their financial statements. Lessees will have a single accounting
model for all leases, with certain exemptions. Lessor accounting is substantially unchanged. Management is in the process of assessing
the impact of the standard on the Company’s financial position or performance.



F-10







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2. | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | -- | -------------------------------------------------------------------------------------------------------------



| | · | Amendment
                                         in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and
                                         Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate
                                         or Joint Venture
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments address an
acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of
assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss
is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is
recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
In December 2015 the IASB postponed the effective date of this amendment indefinitely pending the outcome of its research project
on the equity method of accounting. The application of this amendment has no impact on the financial position or the performance
of the Company since the Company is not an investment entity.



| | · | IAS
                                         12: Recognition of Deferred Tax Assets for Unrealized Losses (Amendments)
| | - | ----------------------------------------------------------------------------------------------------------------------

The Amendments become effective
for annual periods beginning on or after 1 January 2017 with earlier application permitted. The objective of the Amendments is
to clarify the requirements of deferred tax assets for unrealized losses in order to address diversity in practice in the application
of IAS 12 Income Taxes. The specific issues where diversity in practice existed relate to the existence of a deductible temporary
difference upon a decrease in fair value, to recovering an asset for more than its carrying amount, to probable future taxable
profit and to combined versus separate assessment. The application of these amendment have no impact on the financial position
or the performance of the Company.



| | · | IAS
                                         7: Disclosure Initiative (Amendments)
| | - | ----------------------------------------------------------------------------------

The Amendments are effective
for annual periods beginning on or after 1 January 2017 with earlier application permitted. The objective of the Amendments is
to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities,
including both changes arising from cash flows and non-cash changes. The Amendments specify that one way to fulfil the disclosure
requirement is by providing a tabular reconciliation between the opening and closing balances in the statement of financial position
for liabilities arising from financing activities, including changes from financing cash flows, changes arising from obtaining
or losing control of subsidiaries or other businesses, the effect of changes in foreign exchange rates, changes in fair values
and other changes. Management is in the process of assessing the impact of the standard on the Company’s financial position
or performance.



| | · | IFRS
                                         2: Classification and Measurement of Share based Payment Transactions (Amendments)
| | - | --------------------------------------------------------------------------------------------------------------------------------

The Amendments are effective
for annual periods beginning on or after 1 January 2018 with earlier application permitted. The Amendments provide requirements
on the accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments,
for share-based payment transactions with a net settlement feature for withholding tax obligations and for modifications to the
terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.
Management is in the process of assessing the impact of IFRS 2 Amendments on the Company’s financial position or performance.



| | · | IFRS
                                         4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments)
| | - | -----------------------------------------------------------------------------------------------------------------------------------

The Amendments are effective
for annual periods beginning on or after 1 January 2018. The amendments address concerns arising from implementing the new financial
instruments Standard, IFRS 9, before implementing the new insurance contracts standard that the Board is developing to replace
IFRS 4. The amendments introduce two options for entities issuing insurance contracts: a temporary exemption from applying IFRS
9 and an overlay approach, which would permit entities that issue contracts within the scope of IFRS 4 to reclassify, from profit
or loss to other comprehensive income, some of the income or expenses arising from designated financial assets. Management is
in the process of assessing the impact of these Amendments on the Company’s financial position or performance.



| | · | IAS
                                         40: Transfers to Investment Property (Amendments)
| | - | ----------------------------------------------------------------------------------------------

The Amendments are effective
for annual periods beginning on or after 1 January 2018 with earlier application permitted. The Amendments clarify when an entity
should transfer property, including property under construction or development into, or out of investment property. The Amendments
state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there
is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence
of a change in use. The Company does not expect that these amendments will have an impact on its financial position or performance.



F-11







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2. | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | -- | -------------------------------------------------------------------------------------------------------------



| | · | IFRIC
                                         INTERPETATION 22: Foreign Currency Transactions and Advance Consideration
| | - | ------------------------------------------------------------------------------------------------------------------------



The Interpretation is effective
for annual periods beginning on or after 1 January 2018 with earlier application permitted. The Interpretation clarifies the accounting
for transactions that include the receipt or payment of advance consideration in a foreign currency. The Interpretation covers
foreign currency transactions when an entity recognizes a non-monetary asset or a non-monetary liability arising from the payment
or receipt of advance consideration before the entity recognizes the related asset, expense or income. The Interpretation states
that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the
non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, then the entity
must determine a date of the transactions for each payment or receipt of advance consideration. The Company does not expect that
this interpetation will have an impact on its financial position or performance.



| | · | The
                                         IASB has issued the Annual Improvements to IFRSs 2014 – 2016 Cycle, which is a
                                         collection of amendments to IFRSs. The amendments are effective for annual periods beginning
                                         on or after 1 January 2017 for IFRS 12 Disclosure of Interests in Other Entities and
                                         on or after 1 January 2018 for IFRS 1 First-time Adoption of International Financial
                                         Reporting Standards and for IAS 28 Investments in Associates and Joint Ventures. Earlier
                                         application is permitted for IAS 28 Investments in Associates and Joint Ventures. The
                                         Company does not expect that these amendments will have an impact on its financial position
                                         or performance.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS
                                         1 First-time Adoption of International Financial Reporting Standards: This improvement
                                         deletes the short-term exemptions regarding disclosures about financial instruments,
                                         employee benefits and investment entities, applicable for first time adopters.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                           

| | · | IAS
                                         28 Investments in Associates and Joint Ventures: The amendments clarify that the election
                                         to measure at fair value through profit or loss an investment in an associate or a joint
                                         venture that is held by an entity that is venture capital organization, or other qualifying
                                         entity, is available for each investment in an associate or joint venture on an investment-by-investment
                                         basis, upon initial recognition.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | · | IFRS
                                         12 Disclosure of Interests in Other Entities: The amendments clarify that the disclosure
                                         requirements in IFRS 12, other than those of summarized financial information for subsidiaries,
                                         joint ventures and associates, apply to an entity’s interest in a subsidiary, a
                                         joint venture or an associate that is classified as held for sale, as held for distribution,
                                         or as discontinued operations in accordance with IFRS 5.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.3 | Significant accounting policies, judgments, estimates
and assumptions:The preparation of consolidated financial statements in conformity with IFRS requires management to
make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the amounts of revenues and expenses recognised
during the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require
a material adjustment to the carrying amount of the asset or liability affected in the future.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Judgments:In the process of applying the Company’s accounting policies, management has made the following judgments that had a
significant effect on the amounts recognised in the consolidated financial statements.



| | Ø | Allowance
                                         for doubtful trade receivables:Provisionsfor doubtful trade receivables
                                         are recorded based on management’s expectations on future trade receivables recoveries.
                                         Provisions for doubtful trade receivables as of 31 December 2016 and 2015 were $47 and
                                         $127, respectively.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-12







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | - | -------------------------------------------------------------------------------------------------------------



Estimates and assumptions:The key assumptions concerning the future and other key sources of estimation uncertainty at the financial position date,
that have a significant risk of causing a significant adjustment to the carrying amount of assets and liabilities within the next
financial year, are discussed below. The Company based its assumptions and estimates on parameters available when the consolidated
financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions
when they occur.



| | Ø | Carrying
                                         amount of vessels, net: Vessels are stated at cost, less accumulated depreciation
                                         (including depreciation of dry-docking costs and the amortization of the component attributable
                                         to favourable or unfavourable lease terms relative to market terms) and accumulated impairment
                                         losses. The estimates and assumptions that have the most significant effect on the vessels
                                         carrying amount are estimations in relation to useful lives of vessels, their residual
                                         value and estimated dry docking dates. The key assumptions used are further explained
                                         in notes 2.9 to 2.13.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Impairment
                                         of Non-Financial Assets: The Company’s impairment test for non-financial assets
                                         is based on the assets’ recoverable amount, where the recoverable amount is the
                                         greater of fair value less costs to sell and value in use. The Company engaged independent
                                         valuation specialists to determine the fair value of non-financial assets as at December
                                         31, 2016. The value in use calculation is based on a discounted cash flow model. The
                                         value in use calculation is most sensitive to the discount rate used for the discounted
                                         cash flow model as well as the expected net cash flows and the growth rate used for extrapolation.
                                         See notes 2.13 and 5.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Share
                                         based payments:TheCompany measures the cost of equity-settled transactions
                                         with employees by reference to the fair value of the equity instruments at the date at
                                         which they are granted. Estimating fair value for share-based payment transactions may
                                         require determination of the most appropriate valuation model, which is depended on the
                                         terms and conditions of the grant. This estimate also requires determination of the most
                                         appropriate inputs to the valuation model including, expected volatility and dividend
                                         yield and making assumptions about them. The assumptions and models used for estimating
                                         fair value for share-based payment transactions are disclosed in note 13.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.4 | Accounting for revenue and
                                         related expenses:The Company generates its revenues from charterers for the
                                         charter hire of its vessels. Vessels are chartered using time charters and bareboat,
                                         where a contract is entered into for the use of a vessel for a specific period of time
                                         and a specified daily charter hire rate. If a time charter agreement exists and collection
                                         of the related revenue is reasonably assured, revenue is recognised on a straight line
                                         basis over the period of the time charter. Such revenues are treated in accordance with
                                         IAS 17 as lease income as explained in note 2.23 below. Associated voyage expenses, which
                                         primarily consist of bunkers and commissions, are recognised on a pro-rata basis over
                                         the duration of the period of the time charter. Deferred revenue relates to cash received
                                         prior to the financial position date and is related to revenue earned after such date.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest income: interest income
is recognised as interest on an accrual basis.



Voyage expenses: Voyage
expenses primarily consist of port expenses and owners’ expenses borne and paid by the charterer, canal and bunker expenses
that are unique to a particular charter under time charter arrangements or by the Company under voyage charter arrangements. Furthermore,
voyage expenses include commission on revenue paid by the Company.



Vessel operating expenses: Vessel
operating expenses are accounted for on an accruals basis.



| | 2.5 | Foreign currency translation:The functional currency of Globus and its subsidiaries is the U.S. dollar, which
                                         is also the presentation currency of the Company, since the Company’s vessels operate
                                         in international shipping markets, whereby the U.S. dollar is the currency used for transactions.
                                         Transactions involving other currencies during the period are converted into U.S. dollars
                                         using the exchange rates in effect at the time of the transactions. At the financial
                                         position dates, monetary assets and liabilities, which are denominated in currencies
                                         other than the U.S. dollar, are translated into the functional currency using the period-end
                                         exchange rate. Gains or losses resulting from foreign currency transactions are included
                                         in foreign exchange gains/(losses), net in the consolidated statement of comprehensive
                                         income.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.6 | Cash and cash equivalents:The Company considers highly liquid investments such as time deposits and certificates
                                         of deposit with original maturity of three months or less to be cash and cash equivalents.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-13







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | - | -------------------------------------------------------------------------------------------------------------



| | 2.7 | Trade receivables, net:The amount shown as trade receivables at each financial position date includes
                                         estimated recoveries from charterers for hire, freight and demurrage billings, net of
                                         an allowance for doubtful accounts. Trade receivables are measured at amortized cost
                                         less impairment losses, which are recognized in the consolidated statement of comprehensive
                                         income. At each financial position date, all potentially uncollectible accounts are assessed
                                         individually for the purpose of determining the appropriate allowance for doubtful accounts.
                                         The provision for doubtful accounts at December 31, 2016 was $47 (2015:$127).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.8 | Inventories: Inventories
                                         consist of lubricants and gas cylinders and are stated at the lower of cost and net realisable
                                         value. The cost is determined by the first-in, first-out method.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.9 | Vessels, net: Vessels
                                         are stated at cost, less accumulated depreciation (including depreciation of dry-docking
                                         costs and amortization of components attributable to favourable or unfavourable lease
                                         terms relative to market terms) and accumulated impairment losses. Vessel cost consists
                                         of the contract price for the vessel and any material expenses incurred upon acquisition
                                         (initial repairs, improvements and delivery expenses, interest, commissions paid and
                                         on-site supervision costs incurred during the construction periods). Any seller’s
                                         credit, i.e., amounts received from the seller of the vessels until date of delivery
                                         is deducted from the cost of the vessel. Subsequent expenditures for conversions and
                                         major improvements are also capitalised when the recognition criteria are met. Otherwise
                                         these amounts are charged to expenses as incurred.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.10 | Deferred dry-docking costs:
                                         Vessels are required to be dry-docked for major repairs
                                         and maintenance that cannot be performed while the vessels are operating. Dry-dockings
                                         occur approximately every 2.5 years. The costs associated with the dry-dockings are capitalised
                                         and depreciated on a straight-line basis over the period between dry-dockings, to a maximum
                                         of 2.5 years. At the date of acquisition of
                                         a vessel, management estimates the component of the cost that corresponds to the economic
                                         benefit to be derived until the first scheduled dry-docking of the vessel under the ownership
                                         of the Company and this component is depreciated on a straight-line basis over the remaining
                                         period through the estimated dry-docking date.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.11 | Depreciation: The cost
                                         of each of the Company’s vessels is depreciated on a straight-line basis over each
                                         vessel’s remaining useful economic life, after considering the estimated residual
                                         value of each vessel, beginning when the vessel is ready for its intended use. Management
                                         estimates that the useful life of new vessels is 25 years, which is consistent with industry
                                         practice. The residual value of a vessel is the product of its lightweight tonnage and
                                         estimated scrap value per lightweight ton. The residual values and useful lives are reviewed
                                         at each reporting date and adjusted prospectively, if appropriate. During the fourth
                                         quarter of 2015, the Company reduced the scrap rate from $335/ton to $240/ton due to
                                         the reduced scrap rates worldwide. This resulted to an extra depreciation expense of
                                         $91 included in the consolidated statement of comprehensive loss/income for 2015. During
                                         the second quarter of 2016 the Company reduced the scrap rate from $240/ton to $200/ton
                                         due to the reduced scrap rates worldwide. This resulted to an extra depreciation expense
                                         of $96 included in the consolidated statement of comprehensive loss/income for 2016.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.12 | Amortization of lease component:When the Company acquires a vessel subject to an operating lease, it amortizes the
                                         amount reflected in the cost of that vessel that is attributable to favourable or unfavourable
                                         lease terms relevant to market terms, over the remaining term of the lease. The amortization
                                         is included in line “amortization of fair value of time charter attached to vessels”
                                         in the income statement component of the consolidated statement of comprehensive income.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.13 | Impairment of non-financial
                                         assets: The Company assesses at each reporting date whether there is an indication
                                         that a vessel may be impaired. The vessel’s recoverable amount is estimated when
                                         events or changes in circumstances indicate the carrying value may not be recoverable.
                                         If such indication exists and where the carrying value exceeds the estimated recoverable
                                         amounts, the vessel is written down to its recoverable amount. The recoverable amount
                                         is the greater of fair value less costs to sell and value-in-use. In assessing value-in-use,
                                         the estimated future cash flows are discounted to their present value using a discount
                                         rate that reflects current market assessments of the time value of money and the risks
                                         specific to the vessel. Impairment losses are recognised in the consolidated statement
                                         of comprehensive income. A previously recognised impairment loss is reversed only if
                                         there has been a change in the estimates used to determine the asset’s recoverable
                                         amount since the last impairment loss was recognised. If that is the case, the carrying
                                         amount of the asset is increased to its recoverable amount. That increased amount cannot
                                         exceed the carrying amount that would have been determined, net of depreciation, had
                                         no impairment loss been recognised for the asset in prior years. Such reversal is recognised
                                         in the consolidated statement of comprehensive income. After such a reversal, the depreciation
                                         charge is adjusted in future periods to allocate the asset’s revised carrying amount,
                                         less any residual value, on a systematic basis over its remaining useful life see note
                                         5.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.14 | Long-term debt: Long-term
                                         debt is initially recognised at the fair value of the consideration received net of financing
                                         costs directly attributable to the borrowing. After initial recognition, long-term debt
                                         is subsequently measured at amortized cost using the effective interest rate method.
                                         Amortized cost is calculated by taking into account any financing costs and any discount
                                         or premium on settlement. Gains and losses are recognised in net profit or loss when
                                         the liabilities are derecognised or impaired, as well as through the amortization process.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-14







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | - | -------------------------------------------------------------------------------------------------------------



| | 2.15 | Financing costs:
                                         Fees incurred for obtaining new loans or refinancing existing loans are deferred and
                                         amortized over the life of the related debt, using the effective interest rate method.
                                         Any unamortized balance of costs relating to loans repaid or refinanced is expensed in
                                         the period the repayment or refinancing is made.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.16 | Borrowing costs:Borrowing
                                         costs consist of interest and other costs that the Company incurs in connection with
                                         the borrowing of funds.Borrowing costs are expensed to the income statement component
                                         of the consolidated statement of comprehensive income as incurred under “interest
                                         expense and finance costs” except borrowing costs that relate to a qualifying asset.
                                         A qualifying asset is an asset that necessarily takes a substantial period of time to
                                         get ready for its intended use. Borrowing costs that relate to qualifying assets are
                                         capitalised. For the years ended December 31, 2016, 2015 and 2014, the Company had no
                                         qualifying assets.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.17 | Operating segment:
                                         The Company reports financial information and evaluates its operations by charter revenues
                                         and not by other factors such as length of ship employment for its customers i.e., spot
                                         or time charters or type of vessel. The Company does not use discrete financial information
                                         to evaluate the operating results for each such type of charter. Although revenue can
                                         be identified for these types of charters, management cannot and does not identify expenses,
                                         profitability or other financial information for these charters. As a result, management,
                                         including the chief operating decision maker, reviews operating results solely by revenue
                                         per day and operating results of the fleet and thus the Company has determined that it
                                         operates as one operating segment. Furthermore, when the Company charters a vessel to
                                         a charterer, the charterer is free to trade the vessel worldwide and, as a result, the
                                         disclosure of geographical information is impracticable.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.18 | Provisions and contingencies:Provisions are recognized when the Company has a present legal or constructive obligation
                                         as a result of past events, it is probable that an outflow of resources embodying economic
                                         benefits will be required to settle the obligation and, a reliable estimate of the amount
                                         of the obligation can be made. Provisions are reviewed at each financial position date
                                         and adjusted to reflect the present value of the expenditure expected to be required
                                         to settle the obligation. Contingent liabilities are not recognized in the financial
                                         statements but are disclosed unless the possibility of an outflow of resources embodying
                                         economic benefits is remote, in which case there is no disclosure. Contingent assets
                                         are not recognized in the financial statements but are disclosed when an inflow of economic
                                         benefits is probable.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.19 | Pension and retirement
                                         benefit obligations:The crew on board the vessels owned by the ship-owning companies
                                         owned by Globus is under short-term contracts (usually up to nine months) and, accordingly,
                                         no one is liable for any pension or post-retirement benefits payable to the crew.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Provision
for employees’ severance compensation:The Greek employees, of the Company are bound by the Greek Labour law. Accordingly,
compensation is payable to such employees upon dismissal or retirement. The amount of compensation is based on the number of years
of service and the amount of remuneration at the date of dismissal or retirement. If the employees’ remain in the employment
of the Company until normal retirement age, they are entitled to retirement compensation which is equal to 40% of the compensation
amount that would be payable if they were dismissed at that time.



The number
of employees that will remain with the Company until retirement age is not known. The Company has provided for the employees’
retirement compensation liability, an amount of $78 as at December 31, 2016 (2015:$73), calculated by using the Projected Unit
Credit Method and disclosed under non-current liabilities in the consolidated statement of financial position.



| | 2.20 | Offsetting of financial
                                         assets and liabilities:Financial assets and liabilities are offset and the net amount
                                         is presented in the consolidated financial position only when the Company has a legally
                                         enforceable right to set off the recognised amounts and intend either to settle such
                                         asset and liability on a net basis or to realize the asset and settle the liability simultaneously.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.21 | Derecognition of financial assets and liabilities:
| | ---- | --------------------------------------------------



| | (i) | Financial assets: A financial asset
                                         (or, where applicable a part of a financial asset or part of a group of similar financial
                                         assets) is derecognised where:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                         rights to receive cash flows from the asset have expired;
| | - | ------------------------------------------------------------------------------------------------------



| | · | the
                                         Company retains the right to receive cash flows from the asset, but has assumed an obligation
                                         to pay them in full without material delay to a third party under a “pass-through”
                                         arrangement; or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                         Company has transferred its rights to receive cash flows from the asset and either (a)
                                         has transferred substantially all the risks and rewards of the assets, or (b) has neither
                                         transferred nor retained substantially all the risks and rewards of the asset, but has
                                         transferred control of the asset.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-15







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and Significant
                                         Accounting Policies (continued)
| | - | -------------------------------------------------------------------------------------------------------------



Where the Company has transferred
its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards
of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement
in the asset.



Continuing involvement that
takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset
and the maximum amount of consideration that the Company could be required to repay.



| | (ii) | Financial liabilities: A financial
                                         liability is derecognised when the obligation under the liability is discharged or cancelled
                                         or expires.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Where an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition
of a new liability, and, the difference in the respective carrying amounts is recognised in profit or loss.



| | 2.22 | Leases – where the
                                         Company is the lessee:Leases where a significant portion of the risks and rewards
                                         of ownership are retained by the lessor are classified as operating leases. Payments
                                         made under operating leases are charged to the income statement component of the consolidated
                                         statement of comprehensive income on a straight-line basis over the period of the lease.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.23 | Leases – where an
                                         entity is the lessor:Leases of vessels where the entity does not transfer substantially
                                         all the risks and benefits of ownership of the vessel are classified as operating leases.
                                         Lease income on operating leases is recognised on a straight-line basis over the lease
                                         term. Contingent rents are recognised as revenue in the period in which they are earned.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.24 | Insurance:The Company
                                         recognizes insurance claim recoveries for insured losses incurred on damage to vessels.
                                         Insurance claim recoveries are recorded, net of any deductible amounts, at the time the
                                         Company’s vessels suffer insured damages. They include the recoveries from the
                                         insurance companies for the claims, provided there is evidence the amounts are virtually
                                         certain to be received.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.25 | Share based compensation:Globus operates equity-settled, share-based compensation plans. The value of the
                                         service received in exchange of the grant of shares is recognized as an expense. The
                                         total amount to be expensed over the vesting period is determined by reference to the
                                         fair value of the share awards at the grant date. The relevant expense is recognized
                                         in the income statement component of the consolidated statement of comprehensive income,
                                         with a corresponding impact in equity.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.26 | Share capital:Common
                                         shares and preferred shares are classified as equity. Incremental costs directly attributable
                                         to the issue of new shares are recognised in equity as a deduction from the proceeds.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.27 | Dividends:Dividends
                                         to shareholders are recognised in the period in which the dividends are declared and
                                         appropriately authorised and are accounted for as dividends payable until paid.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2.28 | Non-current assets held
                                         for sale:Non-current assets and disposal groups classified as held for sale are
                                         measured at the lower of carrying amount and fair value less costs to sell. If the carrying
                                         amount exceeds fair value less costs to sell, the Company recognises a loss under reversal
                                         of impairment/(impairment loss) in the income statement component of the consolidated
                                         statement of comprehensive income, if the non-current asset or disposal group is subsequently
                                         remeasured at fair value less costs to sell, any difference with the carrying amount
                                         is recognised under reversal of impairment/ (impairment loss) in the income statement
                                         component of the consolidated statement of comprehensive income.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-16







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and Significant Accounting Policies
(continued)
| | - | --------------------------------------------------------------------



Non-current assets and disposal
groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available
for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for
recognition as a complete sale within one year from the date of classification. Events or circumstances may extend the period
to complete the sale beyond one year. An extension of the period required to complete a sale does not preclude an asset from being
classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient
evidence that the entity remains committed to its plan to sell the asset. Non-current assets once classified as held for sale
are not depreciated or amortized. If the Company has classified an asset as held for sale but the criteria discussed above are
no longer met, the Company ceases to classify the asset as held for sale. The Company measures a non-current asset that ceases
to be classified as held for sale at the lower of a) its carrying amount before the asset was classified as held for sale, adjusted
for any depreciation, amortization or revaluation that would have been recognised had the asset not been classified as held for
sale and b) its recoverable amount at the date of the subsequent decision to cease classifying the asset as held for sale. The
Company includes any adjustment to the carrying amount of an asset that ceases to be classified as held for sale in the consolidated
statement of comprehensive income in the period the criteria are no longer met. Refer to note 5.



| | 2.29 | Fair value measurement:The Company measures financial instruments, such as, derivatives, and non-financial
                                         assets such as vessels held for sale, at fair value at each reporting date. In addition
                                         fair values of financial instruments measured at amortised cost are disclosed in note
                                         22. Fair value is the price that would be received to sell an asset or paid to transfer
                                         a liability in an orderly transaction between market participants at the measurement
                                         date. The fair value measurement is based on the presumption that the transaction to
                                         sell the asset or transfer the liability takes place either, a) in the principal market
                                         for the asset or the liability or b) in the absence of a principal market, in the most
                                         advantageous market for the asset or liability both being accessible by the Company.
                                         The fair value of an asset or a liability is measured using the assumptions that the
                                         market participants would use when pricing the asset or liability, assuming that the
                                         market participants act in their best economic interest. A fair value measurement of
                                         a non-financial asset takes into account the a market participant’s ability to
                                         generate economic benefits by using the asset in its highest and best use or by selling
                                         it to another market participant that would use the asset in its highest and best use.
                                         The Company uses valuation techniques that are appropriate in the circumstances and for
                                         which sufficient data are available to measure fair value, maximising the use of relevant
                                         observable inputs and minimising the use of unobservable inputs.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company
uses the following hierarchy for determining and disclosing the fair value of assets and liabilities by valuation technique:



Level 1: quoted
(unadjusted) prices in active markets for identical assets or liabilities.



Level 2:
other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly.



Level 3:
techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market
data.



For assets and liabilities
that are recognised in the consolidated financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by reassessing categorization at the end of each reporting period.



The Company engaged independent
valuation specialists to determine the fair value of non-financial assets



| | 2.30 | Current versus non-current
                                         classification: The Company presents assets and liabilities in the statement of financial
                                         position based on current/non-current classification.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



An
asset as current when it is:



| | · | Expected
                                         to be realised or intended to be sold or consumed in a normal operating cycle
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | · | Held
                                         primarily for the purpose of trading
| | - | ----------------------------------------------------------------------------------

| | · | Expected
                                         to be realised within twelve months after the reporting period
| | - | ----------------------------------------------------------------------------------------------------------------

| | · | Cash
                                         or cash equivalent
| | - | ----------------------------------------------------------------



| |  | All other assets are classified as non-current.
| |  | -----------------------------------------------



F-17







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 2 | Basis of Preparation and
                                         Significant Accounting Policies (continued)
| | - | -------------------------------------------------------------------------------------------------------------



A liability
is current:



| | · | It
                                         is expected to be settled in a normal operating cycle
| | - | -------------------------------------------------------------------------------------------------

| | · | It
                                         is held primarily for the purpose of trading
| | - | ----------------------------------------------------------------------------------------

| | · | It
                                         is due to be settled within twelve months after the reporting period
| | - | ----------------------------------------------------------------------------------------------------------------

| | · | There
                                         is no unconditional right to defer the settlement of the liability for at least twelve
                                         months after the reporting period.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



All
other liabilities are classified as non-current



| | 3 | Cash and cash equivalents and Restricted cash
| | - | ---------------------------------------------



For the purpose of the consolidated
statement of financial position, cash and cash equivalents comprise the following:



|              |  | December 31, |    
|------------- |  | ------------ | ---
|              |  | 2016         |    
|Cash on hand  |  |              | 1  
|Cash at Banks |  |              | 162
|Bank deposits |  |              | -  
|Total         |  |              | 163



Cash
held in banks earns interest at floating rates based on daily bank deposit rates. Bank deposits are made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Company and earn interest at the respective
bank deposit rates.



The
fair value of cash and cash equivalents as at December 31, 2016 and 2015 was $163 and $2,005 respectively. In addition as of December
31, 2016, the Company had available $2.6 million (2015:$5.4 million) of undrawn borrowing facilities (note 12).



As at
December 31, 2016, the Company had pledged an amount of $210 ($500 as at December 31, 2015) in order to fulfil collateral requirements.
The fair value of restricted cash as at December 31, 2016 and 2015 was $210 and $500 (Refer to note 12 for further details).



| | 4 | Transactions with Related Parties
| | - | ---------------------------------



The ultimate controlling party
of the Company is Mr. George Feidakis who beneficially owns 1,141,517 common shares as of December 31, 2016 through Firment Trading
Limited, a Marshall Islands company controlled by Mr Feidakis. As at December 31, 2016 and 2015, Mr Feidakis beneficially owned
43.4% and 50.4%, respectively, of Globus’ shares.



The following are the major
transactions which the Company has entered into with related parties during the years ended December 31, 2016, 2015 and 2014:



In August 2006, Globus Shipmanagement
Corp. entered into a rental agreement for 350 square metres of office space for its operations within a building owned by Cyberonica
S.A. (an affiliate of the Company’s chairman). Rental expense was Euro 14,578 ($16) per month up to August 20, 2015, which
was silently extended until December 31, 2015. The rental agreement provides for an annual increase in rent of 2% above the rate
of inflation as set by the Bank of Greece. The contract ran for nine years and could have been terminated by the Company with
six months’ notice, and terminated at the end of 2015. In 2016 the Company renewed the rental agreement at a monthly rate
of Euro 10,360 ($10.9) with a lease period ending January 2, 2025. The Company does not presently own any real estate. During
the years ended December 31, 2016, 2015 and 2014, rent expense was $138, $195 and $234, respectively.



The expense is recognised
in the income statement component of the consolidated statement of comprehensive loss/income under administrative expenses payable
to related parties. As of December 31, 2016 and 2015, $313 and $191 of rent expense respectively was due and unpaid. Rent expense
payable to related parties is classified as trade accounts payable in the consolidated statement of financial position.



F-18







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 4 | Transactions with Related Parties (continued)
| | - | ---------------------------------------------



As of December 28, 2015, Athanasios
Feidakis assumed the position of Chief Executive Officer and Chief Financial Officer. His remuneration for 2015 and 2014 was $60
per annum according to his compensation agreement as a Director of the Company. On August 18, 2016, the Company entered into a
consultancy agreement with an affiliated company of its CEO, Mr. Athanasios Feidakis, for the purpose of providing consulting
services to the Company in connection with the Company’s international shipping and capital raising activities, including
but not limited to assisting and advising the Company’s CEO at an annual fee of Euro 200,000 ($210). The related expense
for 2016 amounted to $97.



In December 2013, Globus entered
into a credit facility for up to $4.0 million with Firment Trading Limited, an affiliate of the Company’s chairman, for
the purpose of financing its general working capital needs. Effective from December 2014, through a supplemental agreement in
April 2015, the credit limit of the facility increased from $4.0 to $8.0 million, and in December 2015, through a second supplemental
agreement, the credit limit of the facility increased from $8.0 to $20.0 million. In December 2015, through a third supplemental
agreement, the Firment Credit Facility was assigned from Firment Trading Limited, a Cypriot company, to Firment Trading Limited,
a Marshall Islands corporation, each of which is an affiliate of the Company’s chairman. The Company has the right to drawdown
any amount up to $20.0 million or prepay any amount, during the availability period, in multiples of $100.



As of December 31, 2016 and
2015 the amounts drawn and outstanding with respect to the facility were $17,435 and $14,600, respectively, and were classified
under “short-term borrowing” for 2016 and under “long-term borrowing” for 2015 in the consolidated statement
of financial position. For the years ended December 31, 2016 and 2015 Globus recognised interest expense of $608 and $460 respectively.
The expense is classified in the income statement component of the consolidated statement of comprehensive loss/income under interest
expense and finance costs and interest payable is classified in the statement of financial position under accrued liabilities
and other payables.



In connection with the February
2017 private placement, as further discussed in Note 23, the Company and Firment Trading Limited agreed to release an amount of
$16,885 out of the then outstanding balance of $18,524 (the remaining outstanding amount of $1,639 continues to accrue under the
Firment Trading Credit Facility as though it were principal) of the Firment Credit Facility and Globus agreed to issue 16,885,000
common shares and a warrant to purchase 6,230,580 common shares of the Company at a price of $1.60 per share. On February 10,
2017 the then outstanding balance ($1,639) of the Firment Credit Facility was fully repaid. The Firment Credit Facility remains
available to the Company until April 12, 2017.



In January 2016, Globus Maritime
Limited entered into a credit facility for up to $3 million with Silaner Investments Limited, an affiliate of the Company’s
chairman, for the purpose of financing its general working capital needs. The Silaner Credit Facility is unsecured and remains
available until its final maturity date at January 12, 2018, when Globus Maritime Limited must repay all drawn and outstanding
amounts at that time. The Company has the right to drawdown any amount up to $3 million or prepay any amount in multiples of $100.
Any prepaid amount can be re-borrowed in accordance with the terms of the facility. Interest on drawn and outstanding amounts
is charged at 5% per annum and no commitment fee is charged on the amounts remaining available and undrawn.



As of December 31, 2016, the
amount drawn and outstanding with respect to the facility was $3,115, and was classified under “under “long-term borrowing”
in the consolidated statement of financial position. For the year ended December 31, 2016, Globus recognised interest expense
of $74. The expense is classified in the income statement component of the consolidated statement of comprehensive loss/income
under interest expense and finance costs and interest payable is classified in the statement of financial position under accrued
liabilities and other payables.



In connection with the February
2017 private placement, Silaner Investments Limited released an amount equal to the outstanding principal of $3,115 (but left
an amount equal to $74 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal) of
the Silaner Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares
and a warrant to purchase 1,149,437 common shares at a price of $1.60 per share. On February 10, 2017 the then outstanding balance
($74) of the Silaner Credit Facility was fully repaid. The Silaner Credit Facility remains available to the Company until January
12, 2018 (Note 23).



In June 2016, Globus Maritime
Limited entered into a consultancy agreement with Eolos Shipmanagement S.A., an affiliate of the Company’s chairman, for
the purpose of providing consultancy services to Eolos Shipmanagement S.A. For these services the Company receives a daily fee
of $1. For 2016 the total income from these fees amounted to $187 and is classified in the income statement component of the consolidated
statement of comprehensive loss/income under management & consulting fee income.



F-19







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 4 | Transactions with Related Parties (continued)
| | - | ---------------------------------------------



Compensation of Key Management Personnel of
the Company:



Compensation to Globus non-executive
directors is analysed as follows:



|                               |  | For the year ended December 31, |    
|------------------------------ |  | ------------------------------- | ---
|                               |  | 2016                            |    
|Director’s remuneration        |  |                                 | 130
|Share-based payments (note 13) |  |                                 | 35 
|Total                          |  |                                 | 165



As of December 31, 2016 and
2015, $393 and $302 of the compensation to non-executive directors was remaining due and unpaid, respectively. Amounts payable
to non-executive directors are classified as trade accounts payable in the consolidated statement of financial position.



Compensation to the Company’s
executive directors is analysed as follows:



|                               |  | For the year ended December 31, |   
|------------------------------ |  | ------------------------------- | --
|                               |  | 2016                            |   
|Short-term employee benefits   |  |                                 | 82
|Share-based payments (note 13) |  |                                 | 15
|Total                          |  |                                 | 97



Short-term employee benefits
are recognised in the income statement component of the consolidated statement of comprehensive loss/income under administrative
expenses payable to related parties.



In July 2016 the remaining
2,567 series A preferred shares, granted to Company’s former Chief Executive Officer were redeemed and former Chief Executive
Officer was compensated with the amount of $242. As of December 31, 2016, the Company had no series A preferred shares outstanding.



| | 5 | Vessels, net
| | - | ------------



The amounts in the consolidated
statement of financial position are analysed as follows:



|                                   |  | Vessels
    
cost |         |   | Vessels
    depreciation |  |          | Dry
    docking costs |  |  | Depreciation
    of dry docking costs |   |  | Fair
    value of time charter attached |        |   | Amortization
    of fair value of time charter attached |  |       | Net
    Book Value | 
|---------------------------------- |  | ----------------- | ------- | - | ------------------------ |  | -------- | --------------------- |  |  | ------------------------------------- | - |  | --------------------------------------- | ------ | - | ------------------------------------------------------- |  | ----- | ------------------ | 
|Balance at
    January 1, 2015     |  |                   | 240,447 |   |                          |  | (100,310 | )                     |  |  | 5,028                                 |   |  |                                         | (3,470 | ) |                                                         |  | 4,650 |                    | 
|Additions/ (Dry Docking Component) |  |                   | (600    | ) |                          |  | -        |                       |  |  | 1,581                                 |   |  |                                         | -      |   |                                                         |  | -     |                    | 
|Sale of vessel                     |  |                   | (20,900 | ) |                          |  | 16,271   |                       |  |  | (2,633                                | ) |  |                                         | 1,914  |   |                                                         |  | -     |                    | 
|Impairment loss                    |  |                   | (20,144 | ) |                          |  | -        |                       |  |  | -                                     |   |  |                                         | -      |   |                                                         |  | -     |                    | 
|Depreciation & Amortization        |  |                   | -       |   |                          |  | (6,047   | )                     |  |  | -                                     |   |  |                                         | (1,062 | ) |                                                         |  | -     |                    | 
|Balance at December 31, 2015       |  |                   | 198,803 |   |                          |  | (90,086  | )                     |  |  | 3,976                                 |   |  |                                         | (2,618 | ) |                                                         |  | 4,650 |                    | 
|Additions/ (Dry Docking Component) |  |                   | -       |   |                          |  | -        |                       |  |  | 478                                   |   |  |                                         | -      |   |                                                         |  | -     |                    | 
|Sale of subsidiary                 |  |                   | (19,647 | ) |                          |  | 7,200    |                       |  |  | (600                                  | ) |  |                                         | 276    |   |                                                         |  | -     |                    | 
|Depreciation & Amortization        |  |                   | -       |   |                          |  | (4,985   | )                     |  |  | -                                     |   |  |                                         | (1,005 | ) |                                                         |  | -     |                    | 
|Balance at December 31, 2016       |  |                   | 179,156 |   |                          |  | (87,871  | )                     |  |  | 3,854                                 |   |  |                                         | (3,347 | ) |                                                         |  | 4,650 |                    | 



F-20







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 5 | Vessels, net (continued)
| | - | ------------------------



For the purpose
of the consolidated statement of comprehensive income, depreciation, as stated in the income statement component, comprises the
following:



|                                               |  | For the year ended December 31, |      
|---------------------------------------------- |  | ------------------------------- | -----
|                                               |  | 2016                            |      
|Vessels Depreciation                           |  |                                 | 4,985
|Depreciation on office furniture and equipment |  |                                 | 29   
|Total                                          |  |                                 | 5,014



The Company’s
vessels have been pledged as collateral to secure the bank loans discussed in note 12.



Impairment
of non-financial assets: As of December 31, 2016, the Company performed an assessment on whether there is an indication
that a vessel may be impaired. Discounted future cash flows for each vessel were determined and compared to the vessel’s
carrying value. The projected net discounted future cash flows for the first three years were determined by considering an estimate
daily time charter equivalent based on the most recent blended (for modern and older vessels) FFA (i.e. Forward Freight Agreements)
time charter rate for the remaining year of 2017, 2018 and 2019 respectively, for each type
of vessel. For the remaining useful life of the vessels the Company used the historical ten-year blended average one-year time
charter rates substituting for the years 2007, 2008 and 2016 that were considered as extreme values, with the years 2004, 2005
and 2006. The rates were adjusted assuming an annual growth rate of 1.7% as published by the International Monetary Fund, net
of commissions. Expected outflows for scheduled vessels maintenance were taken into consideration as well as vessel operating
expenses assuming an average annual inflation rate of approximately 4% every two years. The average time charter rates used were
in line with the overall chartering strategy, especially in periods/years of depressed charter rates; reflecting the full operating
history of vessels of the same type and particulars with the Company’s operating fleet (Supramax and Panamax vessels with
a deadweight (“dwt”) of over 50,000 and 70,000, respectively) and they covered at least one full business cycle. The
average annual inflation rate applied on vessels’ maintenance and operating costs approximated current projections for global
inflation rate for the remaining useful life of the Company’s vessels. Effective fleet utilization was assumed at 90% (including
ballast days), taking into account the period(s) each vessel is expected to undergo her scheduled maintenance (dry-docking and
special surveys), as well as an estimate of the period(s) needed for finding suitable employment and off-hire for reasons other
than scheduled maintenance, assumptions in line with the Company’s expectations for future fleet utilization under the current
fleet deployment strategy.



As of December
31, 2016 no impairment loss was recognized as the vessels’ recoverable amounts exceeded their carrying amounts. In July
2015 m/v Tiara was sold and the Company recognized an impairment loss of $7,745. As of December 31, 2015 the Company concluded
that the recoverable amount of m/v Energy Globe was lower than its carrying amount and recognized an impairment loss of $12,399.
As of December 31, 2014 no impairment loss was recognized as the vessels’ recoverable amounts exceeded their carrying amounts.



|                                                                  |  | (Impairment loss)/Reversal of impairment |  
|----------------------------------------------------------------- |  | ---------------------------------------- | -
|                                                                  |  | For the year ended December 31,          |  
|Vessels                                                           |  | 2016                                     |  
|m/v Tiara Globe (vessel ceased to be classified as held for sale) |  |                                          | -
|m/v Energy Globe                                                  |  |                                          | -
|(Impairment loss)/Reversal of impairment                          |  |                                          | -



Fair
value of time charter attached to vessels: During the year ended December 31, 2011, the Company acquired m/v Sun
Globe for a purchase price of $30,300. The vessel was acquired subject to time charter with favourable terms relative to the market.
The Company estimated, as of the date of acquisition, the amount included in the cost of the aforementioned vessels that was attributable
to the favourable terms of the time charters relative to market terms to be $2,500. This amount is amortized on a straight line
basis over the remaining term of the respective time charters, which was June 2013, for m/v Moon Globe and January 2015, for m/v
Sun Globe. Amortization for the year 2015 amounted to $41 and was included in the income statement component of the consolidated
statement of comprehensive loss/income under amortization of fair value of time charter attached to vessels. As of December 31,
2015 the fair value of time charter attached to vessels were fully amortized and there was no amortization expense for the year
2016.



F-21







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 6 | Inventories
| | - | -----------



Inventories in the consolidated
statement of financial position are analysed as follows:



|              |  | December 31, |    
|------------- |  | ------------ | ---
|              |  | 2016         |    
|Lubricants    |  |              | 363
|Gas cylinders |  |              | 52 
|Bunkers       |  |              | 101
|Total         |  |              | 516



| | 7 | Prepayments and other assets
| | - | ----------------------------



Prepayments
and other assets in the consolidated statement of financial position are analysed as follows:



|                                   |  | December 31, |      
|---------------------------------- |  | ------------ | -----
|                                   |  | 2016         |      
|Interest receivable                |  |              | -    
|Bunkers                            |  |              | 504  
|Other prepayments and other assets |  |              | 513  
|Total                              |  |              | 1,017



| | 8 | Trade accounts payable
| | - | ----------------------



Trade accounts
payable in the consolidated statement of financial position as at December 31, 2016 and 2015, amounted to $4,757 and $4,011, respectively.
Trade accounts payable are non-interest bearing.



| | 9 | Accrued liabilities and other payables
| | - | --------------------------------------



Accrued
liabilities and other payables in the consolidated statement of financial position are analysed as follows:



|                                                |  | December 31, |      
|----------------------------------------------- |  | ------------ | -----
|                                                |  | 2016         |      
|Accrued interest                                |  |              | 1,266
|Accrued audit fees                              |  |              | 64   
|Other accruals                                  |  |              | 1065 
|Insurance deductibles                           |  |              | 134  
|Dividend payable on  Preferred Shares (note 17) |  |              | -    
|Other payables                                  |  |              | 80   
|Total                                           |  |              | 2,609



| | · | Interest
                                         is normally settled quarterly throughout the year.
| | - | ----------------------------------------------------------------------------------------------------

| | · | Other
                                         payables are non-interest bearing.
| | - | ---------------------------------------------------------------------------------



| | 10 | Share Capital and Share Premium
| | -- | -------------------------------



The authorised
share capital of Globus consisted of the following:



|                                                           |  | December 31, |      
|---------------------------------------------------------- |  | ------------ | -----
|                                                           |  | 2016         |      
|Authorised share capital:                                  |  |              |      
|500,000,000 Common Shares of par value $0.004 each         |  |              | 2,000
|100,000,000 Class B common shares of par value $0.001 each |  |              | 100  
|100,000,000 Preferred shares of par value $0.001 each      |  |              | 100  
|Total authorised share capital                             |  |              | 2,200



F-22







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 10 | Share Capital and Share Premium (continued)
| | -- | -------------------------------------------



Holders
of the Company’s common shares and Class B shares have equivalent economic rights, but holders of Company’s common
shares are entitled to one vote per share and holders of the Company’s Class B shares are entitled to twenty votes per share.
Each holder of Class B shares may convert, at its option, any or all of the Class B shares held by such holder into an equal number
of common shares.



|Common Shares issued and fully paid                       |  | Number of shares |           |  | USD | 
|--------------------------------------------------------- |  | ---------------- | --------- |  | --- | 
|As at January 1, 2014                                     |  |                  | 2,556,829 |  |     | 
|Issued during the year (share based compensation note 13) |  |                  | 4,577     |  |     | 
|As at December 31, 2014                                   |  |                  | 2,561,405 |  |     | 
|Issued during the year (share based compensation note 13) |  |                  | 18,372    |  |     | 
|As at December 31, 2015                                   |  |                  | 2,579,777 |  |     | 
|Issued during the year (share based compensation note 13) |  |                  | 47,897    |  |     | 
|As at December 31, 2016                                   |  |                  | 2,627,674 |  |     | 



During the
years ended December 31, 2016, 2015 and 2014 Globus issued 47,897, 18,372 and 4,577 common shares respectively as share-based
payments.



|Series A Preferred  Shares issued |  | Number of shares |        |  | USD | 
|--------------------------------- |  | ---------------- | ------ |  | --- | 
|As a January 1, 2014              |  |                  | 2,567  |  |     | 
|Issued during the year            |  |                  | -      |  |     | 
|As at December 31, 2014           |  |                  | 2,567  |  |     | 
|Issued during the year            |  |                  | -      |  |     | 
|As at December 31, 2015           |  |                  | 2,567  |  |     | 
|Issued during the year            |  |                  | -      |  |     | 
|Shares redeemed by the issuer     |  |                  | -2,567 |  |     | 
|As at December 31, 2016           |  |                  | -      |  |     | 



The holders
of Company’s series A preferred shares are entitled to receive, if funds are legally available, dividends payable in cash
in an amount per share to be determined by unanimous resolution of Company’s Remuneration Committee, in its sole discretion.
Company’s board of directors or Remuneration Committee will determine whether funds are legally available under the Marshall
Islands Business Corporations Act (“BCA”) for such dividend. Any accrued but unpaid dividends will not bear interest.
Except as may be provided in the BCA, holders of Globus series A preferred shares do not have any voting rights. Upon the Company’s
liquidation, dissolution or winding up, the holders of its series A preferred shares will be entitled to a preference in the amount
of the declared and unpaid dividends, if any, as of the date of liquidation, dissolution or winding up. Globus series A preferred
shares are not convertible into any of its other capital stock.



In July
2016 the remaining 2,567 series A preferred shares, granted to Company’s former Chief Executive Officer were redeemed and
as of December 31, 2016 the Company had no series A preferred shares outstanding.



As of December
31, 2016, 2015 and 2014 no Class B shares were issued.



Share premium
includes the contribution of Globus’ shareholders to the acquisition of the Company’s vessels. Additionally, share
premium includes the effects of the acquisition of non-controlling interest, the effects of the Globus initial and follow-on public
offerings and the effects of the share based payments described in note 13. Accordingly at December 31, 2016, 2015 and 2014, Globus
share premium amounted to $110,004, $109,954 and $109,894, respectively.



F-23







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 11 | Earnings / (loss) per Share
| | -- | ---------------------------



On October
20, 2016, the Company effected a four-for-one reverse stock split which reduced number of outstanding common shares from 10,510,741
to 2,627,674 shares (adjustments were made based on fractional shares). Unless otherwise noted, all historical share numbers and
per share amounts have been adjusted to give effect to this reverse split.



Basic earnings/(loss) per
share (“EPS”/ ‘‘LPS’’) is calculated by dividing the net profit/(loss) for the year attributable
to Globus shareholders by the weighted average number of shares issued, paid and outstanding.



Diluted earnings/(loss) per
share is calculated by dividing the net profit/(loss) attributable to common equity holders of the parent by the weighted average
shares outstanding during the year plus the weighted average number of common shares that would be issued on the conversion of
all the dilutive potential common shares into common shares.



The following reflects the
earnings/ (loss) and share data used in the basic and diluted loss per share computations:



|                                                          |  | For the year ended December 31, |          
|--------------------------------------------------------- |  | ------------------------------- | ---------
|                                                          |  | 2016                            |          
|(Loss)/Net profit for the year                            |  |                                 | (9,825   
|Less: Dividends on preferred shares (note 17)             |  |                                 | -        
|(Loss)/Net profit attributable to common equity holders   |  |                                 | (9,825   
|Weighted average number of shares for basic & diluted EPS |  |                                 | 2,603,835



| | 12 | Long-Term Debt, net
| | -- | -------------------



Long-term
debt in the consolidated statement of financial position is analysed as follows:





|    |  | Borrower                                                           |  | Loan Balance |         |   | Unamortized Debt Discount |  |      | Total Borrowings | 
|--- |  | ------------------------------------------------------------------ |  | ------------ | ------- | - | ------------------------- |  | ---- | ---------------- | 
|(a) |  | Devocean Maritime LTD., Domina Maritime LTD. & Dulac Maritime S.A. |  |              | 25,937  |   |                           |  | (162 | )                | 
|(c) |  | Artful Shipholding S.A. & Longevity Maritime Limited               |  |              | 19,291  |   |                           |  | (44  | )                | 
|(d) |  | Globus Maritime Limited-Firment Trading Limited (note 4)           |  |              | 17,435  |   |                           |  | -    |                  | 
|(e) |  | Globus Maritime Limited-Silaner Credit Facility (note 4)           |  |              | 3,115   |   |                           |  | -    |                  | 
|    |  |                                                                    |  |              |         |   |                           |  |      |                  | 
|    |  | Total at December 31, 2016                                         |  |              | 65,778  |   |                           |  | (206 | )                | 
|    |  | Less: Current Portion                                              |  |              | (23,634 | ) |                           |  | 84   |                  | 
|    |  | Long-Term Portion                                                  |  |              | 42,144  |   |                           |  | (122 | )                | 
|    |  |                                                                    |  |              |         |   |                           |  |      |                  | 
|    |  | Total at December 31, 2015                                         |  |              | 78,578  |   |                           |  | (333 | )                | 
|    |  | Less: Current Portion                                              |  |              | (63,978 | ) |                           |  | 333  |                  | 
|    |  | Long-Term Portion                                                  |  |              | 14,600  |   |                           |  | -    |                  | 





| | (a) | In February 2015, Devocean
                                         Maritime Ltd., Domina Maritime Ltd and Dulac Maritime S.A. (“Devocean et al.”),
                                         vessel owning companies of m/v River Globe, m/v Sky Globe and m/v Star Globe, respectively,
                                         entered into a loan agreement for up to $30,000 with HSH Nordbank AG (“the bank”)
                                         for the purpose of part prepaying the then outstanding secured reducing revolving credit
                                         facility with Credit Suisse AG. The loan facility is in the names of Devocean Maritime
                                         Ltd., Domina Maritime Ltd and Dulac Maritime S.A. as the borrowers and is guaranteed
                                         by Globus (“Guarantor”). The loan facility bears interest at LIBOR plus a
                                         margin of 3.00% for interest periods of three months and 3.10% for interest periods of
                                         one month.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On March
3, 2015, Devocean et al. drew down $29,405 as analyzed below and the Company prepaid $30,000 to Credit Suisse AG reducing the
balance due to Credit Suisse AG to $5,000, which was settled in July 2015.



Tranche (A)
of $8,580 for the purpose of prepaying to Credit Suisse AG the amount outstanding with respect to the m/v River Globe. The balance
outstanding of tranche (A) at December 31, 2015, was $7,863 payable in 16 equal quarterly installments of $239 starting, March
2016, as well as a balloon payment of $4,039 due together with the 16th and final installment due in December 2019.





F-24







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 12 | Long-Term Debt, net (continued)
| | -- | -------------------------------



Tranche (B) of $10,100 for
the purpose of prepaying to Credit Suisse AG the amount outstanding with respect to the m/v Sky Globe. The balance outstanding
of tranche (B) at December 31, 2015, was $9,410 payable in 16 equal quarterly installments of $230 starting, March 2016, as well
as a balloon payment of $5,730 due together with the 16th and final installment due in December 2019.



Tranche (C) of $10,725 for
the purpose of prepaying to Credit Suisse AG the amount outstanding with respect to the m/v Star Globe. The balance outstanding
of tranche (C) at December 31, 2015, was $10,051 payable in 16 equal quarterly installments of $225 starting, March 2016, as well
as a balloon payment of $6,452 due together with the 16th and final installment due in December 2019.



The loan is secured by, among
other things:



| | · | First
                                         preferred mortgage over m/v River Globe, m/v Sky Globe and m/v Star Globe.
| | - | -------------------------------------------------------------------------------------------------------------------------

| | · | Guarantees
                                         from the vessel owning companies and from Globus.
| | - | -----------------------------------------------------------------------------------------------------

| | · | First
                                         preferred assignment of all insurances and earnings of the mortgaged vessels.
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | Assignment
                                         of charter in respect of each vessel and an assignment of any guarantee or security in
                                         respect of such charters.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Assignment
                                         of any related hedging agreements.
| | - | --------------------------------------------------------------------------------------



The original
loan agreement contains various covenants requiring the vessels owning companies and Globus to ensure that:



| | Ø | the
                                         aggregate fair market value of the mortgaged vessels must equal or exceed 125% of the
                                         outstanding balance under the loan agreement.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         ratio of the Company’s total liabilities to its market adjusted total assets shall
                                         always be not higher than 75%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         Company maintain a minimum market adjusted net worth of more than or equal $30,000.
| | - | --------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         vessel owning subsidiaries must each maintain a minimum liquidity of $250 in an account
                                         pledged to the bank,
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         Company shall maintain a minimum liquidity of greater than 5% of its consolidated indebtedness.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



In March
2016 the Company repaid the principal installment of $694. During April 2016, Globus reached an agreement in principle with HSH
Nordbank AG and entered into a supplemental agreement dated December 5, 2016 respecting certain amendments and waivers to the
terms of the loan agreement to cure the breach of certain covenants as of December 31, 2015. It was agreed that certain financial
covenants are relaxed and/or waived for the period from June 3, 2016 to March 3, 2017. More specifically the following were agreed:



| | Ø | the
                                         aggregate fair market value of the mortgaged vessels must equal or exceed 60% of the
                                         outstanding balance under the loan agreement instead of 125%.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         ratio of Globus’s total liabilities to its market adjusted total assets shall always
                                         be not higher than 200% instead of 75%.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         Company maintain a minimum market adjusted net worth of more than or equal $30,000 was
                                         waived
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         vessel owning subsidiaries must each maintain a minimum liquidity of $70 in an account
                                         pledged to the bank instead of $250.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         Company shall maintain a minimum liquidity of greater than 5% of its consolidated indebtedness
                                         was waived.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



It was also
agreed that the Company would pay the June 2016 installment using the pledged cash of $750, that was already deposited in HSH
accounts and that the scheduled installments due in September and December, 2016, each amounting to $694, would be deferred to
final repayment installment (the “deferred amounts”).



As of December
31, 2016, the Company was in compliance with the covenants of HSH Loan Agreement, as amended and in effect.



In March
2017 the Company reached an agreement in principle with HSH Nordbank AG to amend the HSH Loan Agreement (subject to definite documentation)
including amendments to relax or waive certain covenants of the original loan agreement until April 15, 2018. The Company would
pay in September 2017 $1 million for repayment of debt and the four scheduled principal installments due within 2017, each amounting
to $694, will be deferred to the balloon payment. In addition, the Company has undertaken the liability to raise new equity of
minimum $1,800.



F-25







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 12 | Long-Term Debt, net (continued)
| | -- | -------------------------------



| | (b) | In June 2010, Kelty Marine
                                         Ltd entered into a loan agreement (“Kelty Loan Agreement”) for $26,650 with
                                         Commerzbank AG (“the bank”) for the purpose of part financing the acquisition
                                         of m/v Jin Star. The loan facility was in the name of Kelty Marine Ltd as the borrower
                                         and is guaranteed by Globus (“Guarantor”).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2015, the
Company was not in compliance with the security value requirement that required the market value of the m/v Energy Globe (formerly
called m/v Jin Star) and any additional security provided, including the minimum liquidity with the lender, to be equal or greater
than 130% (the actual ratio achieved was 80%) of the aggregate principal amount of debt outstanding under the Kelty Loan Agreement.
The Company was also not in compliance with the minimum liquidity of $1 million with Commerzbank (the actual liquidity was $0.5
million) and the requirement of a minimum equity of $50 million (the actual equity was $30.5 million).



In March 2016, the Company
reached a settlement agreement with Commerzbank relating to the Kelty Loan Agreement. Commerzbank agreed to settle the then outstanding
indebtedness of $15.65 million plus the accrued interest of $122 in return of the consideration from the sale of the shares of
Kelty Marine Ltd. for $6.86 million plus a payment of overdue interest of $40.7.



The result from the sale of
Kelty Marine Ltd. was a gain of $2,257 (including the partial write–off of the outstanding balance of the Commerzbank loan
described above), which is classified under “Gain from sale of subsidiary” in the 2016 consolidated statement of comprehensive
loss/income. Globus Shipmanagement Corp., the Company’s ship management subsidiary continued to act as Kelty Marine Ltd.’s
ship manager at a daily fee of $900 until June 2016 when the related management agreement expired.



| | (c) | In June 2011, Globus through
                                         its wholly owned subsidiaries, Artful Shipholding S.A. and Longevity Maritime Limited,
                                         entered into the DVB Loan Agreement for an amount up to $40.0 million with DVB Bank SE
                                         and used funds borrowed thereunder to finance part of the purchase price for the m/v
                                         Moon Globe and m/v Sun Globe. Globus acts as guarantor for this loan.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The loan is secured by, among
other things:



| | · | First
                                         preferred mortgage over m/v Moon Globe and m/v Sun Globe.
| | - | --------------------------------------------------------------------------------------------------------

| | · | Guarantees
                                         from the vessel owning companies and from Globus.
| | - | -----------------------------------------------------------------------------------------------------

| | · | First
                                         preferred assignment of all insurances and earnings of the mortgaged vessels.
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | Account
                                         pledges respecting the minimum liquidity accounts and operating accounts of the Company
                                         described in the loan agreement.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Assignment
                                         of charter in respect of each vessel, and an assignment of guarantee of charter in respect
                                         of m/v Moon Globe.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The original
loan agreement and/or the original Globus guarantee contains various covenants requiring the vessels owning companies and/or Globus
to, amongst others things, ensure that:



| | Ø | the
                                         aggregate fair market value of the m/v Sun Globe and the m/v Moon Globe must equal or
                                         exceed 130% of the outstanding balance under the loan agreement less any cash up to $1,000
                                         held in the operating accounts pledged to the lender.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         ratio of the Company’s market adjusted net worth to total assets must be greater
                                         than 35%.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         Company maintain a minimum market adjusted net worth of more than $50,000.
| | - | -----------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         vessel owning subsidiaries must each maintain a minimum liquidity of $500 in an account
                                         pledged to the Bank,
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | a
                                         minimum liquidity of the lesser of $10,000 and $1,000 per vessel owned by the Company.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



On April 18, 2016, Globus reached
an agreement with the lender on certain amendments and waivers to the terms of the loan agreement in order to cure the incompliance
with certain covenants as of December 31, 2015 valid for the period from March 1, 2016 to March 31, 2017 (“third waiver
period”) as listed below:



| | Ø | the
                                         aggregate fair market value of the m/v Sun Globe and the m/v Moon Globe must equal or
                                         exceed 50% of the outstanding balance under the loan agreement.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | the
                                         covenant for the Company to maintain a minimum tangible net worth of $50,000 was waived
                                         during the third waiver period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         covenant for the ratio of the Company’s market adjusted net worth to total assets
                                         must be greater than 35% was waived during the third waiver period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         above amendments were subject to a $1.7 million prepayment - to be applied against the
                                         four quarterly installments of each tranche following the prepayment, which was paid
                                         in April, 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-26







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 12 | Long-Term Debt, net (continued)
| | -- | -------------------------------



In June 2011, $19.0 million
was drawn (Tranche A) for the purpose of partly financing the acquisition of the m/v Moon Globe. The balance outstanding at December
31, 2016, of Tranche A was payable in 8 quarterly installments of $440 and a balloon payment of $6.18 million payable together
with the 8th and last installment payable in December 2018. As of December 31, 2016, the outstanding principal balance of Tranche
A was $9.7 million.



In September 2011, $18.0 million
was drawn (Tranche B) for the purpose of partly financing the acquisition of the m/v Sun Globe. The balance outstanding at December
31, 2016 of Tranche B was payable in 9 quarterly installments of $416.25 and a balloon payment of $5.85 million payable together
with the 9th and last installment payable in March 2019. As of December 31, 2016, the outstanding principal balance of Tranche
B was $9.6 million.



In
March 2017 the Company reached an agreement in principle withDVB Bank SE (subject
to definite documentation) to amend the DVB Loan Agreement, including amendments to relax or waive certain covenants for the period
from April 1, 2017 to April 1, 2018 (“Restructuring period”). It was agreed that the amendments would provide that:



| | Ø | All
                                         financial covenants of the initial loan agreement will be waived during the Restructuring
                                         period.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         Company shall pay by September 2017 $1.7 million, which is the aggregated amount of two
                                         quarterly installments for each tranche, and another $1.7 million would be deferred to
                                         the balloon payment of each tranche.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         aggregate fair market value of the m/v Sun Globe and the m/v Moon Globe must equal or
                                         exceed 50% of the outstanding loan balance for the period from April 1, 2017 to December
                                         31, 2017.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | For
                                         the period from January 1, 2018 to June 30, 2018 the percentage becomes 105% and after
                                         June 30, 2018 will become 130%.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | Firment
                                         Trading Limited will provide a letter of undertaking to contribute the $1.7 million payment
                                         to the Company if necessary.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | The
                                         ultimate beneficial owner of Firment Shipping Inc. will provide a letter of undertaking
                                         to pledge his shares in the Company the event of a breach of certain financial covenants
                                         during the period from January 1, 2018 to June 30, 2018.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2016, the
Company was in compliance with the loan covenants of the DVB Loan Agreement, as amended and in effect.



As of December 31, 2015, the
Company was in breach with most of the covenants included in its bank agreements and therefore the total outstanding balance of
these loans was classified under current liabilities.



However, as of December 31,
2016, the aforementioned outstanding bank loan balances, have been classified under current and non-current liabilities, according
to the agreement signed in 2016 and described above.



| | (d) | In December 2013, Globus entered
                                         into a credit facility for up to $4,000 with Firment Trading Limited (“the lender”),
                                         an affiliate of the Company’s chairman, for the purpose of financing its general
                                         working capital needs. The Firment Credit Facility is unsecured and remained available
                                         until its initial final maturity dated December 16, 2015, when Globus must repay all
                                         drawn and outstanding amounts at that time. During December 2014 through a supplemental
                                         agreement reached between the company and the lender, the credit limit of the facility
                                         increased from $4,000 to $8,000 and its final maturity date was extended until April
                                         29, 2016. Globus has the right to drawdown any amount up to $8,000 or prepay any amount,
                                         during the availability period in multiples of $100. During December 2015 the credit
                                         limit of the facility increased from $8.0 to $20.0 million and its final maturity date
                                         was extended to April 12, 2017. In December 2015, the Firment Credit Facility was assigned
                                         from Firment Trading Limited, a Cypriot company, to Firment Trading Limited, a Marshall
                                         Islands corporation, each of which is an affiliate of the Company’s chairman. Any
                                         prepaid amount can be re-borrowed in accordance with the terms of the agreement. Interest
                                         on drawn and outstanding amounts is charged at 5% per annum and no commitment fee is
                                         charged on the amounts remaining available and undrawn.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2016 the
amount drawn and outstanding with respect to the facility was $17,435 and there was an amount of $2,565 available to be drawn
(note 4). As of December 31, 2016, the Company was in compliance with the loan covenants of the Firment Credit Facility.



In connection
with the February 2017 private placement, as further discussed in Note 23, the Company and Firment Trading Limited agreed to release
an amount of $16,885 out of the then outstanding balance of $18,524 (the remaining outstanding amount of $1,639 continues to accrue
under the Firment Trading Credit Facility as though it were principal) of the Firment Credit Facility and Globus agreed to issue
16,885,000 common shares and a warrant to purchase 6,230,580 common shares of the Company at a price of $1.60 per share. On February
10, 2017 the then outstanding balance ($1,639) of the Firment Credit Facility was fully repaid. The Firment Credit Facility remains
available to the Company until April 12, 2017.



F-27







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 12 | Long-Term Debt, net (continued)
| | -- | -------------------------------



| | (e) | In
                                         January 2016, Globus Maritime Limited entered into a credit facility for up to $3,000
                                         with Silaner Investments Limited, an affiliate of the Company’s chairman, for the
                                         purpose of financing its general working capital needs. The Silaner Credit Facility is
                                         unsecured and remains available until its final maturity date no later than January 12,
                                         2018, when Globus Maritime Limited must repay all drawn and outstanding amounts at that
                                         time. The Company has the right to drawdown any amount up to $3,000 or prepay any amount
                                         in multiples of $100. Any prepaid amount can be re-borrowed in accordance with the terms
                                         of the facility. Interest on drawn and outstanding amounts is charged at 5% per annum
                                         and no commitment fee is charged on the amounts remaining available and undrawn.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
of December 31, 2016, the amount drawn and outstanding with respect to the facility was $3,115. As of December 31, 2016the
Company was in compliance with the covenants of the Silaner Credit Facility.



In connection with the February
2017 private placement, Silaner Investments Limited released an amount equal to the outstanding principal of $3,115 (but left
an amount equal to $74 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal) of
the Silaner Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares
and a warrant to purchase 1,149,437 common shares at a price of $1.60 per share. On February 10, 2017 the then outstanding balance
($74) of the Silaner Credit Facility was fully repaid. The Silaner Credit Facility remains available to the Company until January
12, 2018 (Note 23).



The contractual
annual loan principal payments per bank loan to be made subsequent to December 31, 2016 were as follows:



|                    |  | (a)      |        |  | (c)         |  |       | (d)             |  |  | (f)                 |  |  |         |       
|------------------- |  | -------- | ------ |  | ----------- |  | ----- | --------------- |  |  | ------------------- |  |  | ------- | ------
|                    |  | HSH Bank |        |  | DVB Bank    |  |       | Firment
Trading |  |  | Silaner
Investments |  |  | Total   |       
|December 31         |  |          |        |  | Tranche
(A) |  |       | Tranche
(B)     |  |  | Limited             |  |  | Limited |       
|2017                |  |          | 2,774  |  |             |  | 1,760 |                 |  |  | 1,665               |  |  |         | 17,435
|2018                |  |          | 2,774  |  |             |  | 7,940 |                 |  |  | 1,665               |  |  |         | -     
|2019                |  |          | 20,388 |  |             |  | -     |                 |  |  | 6,262               |  |  |         | -     
|2020                |  |          | -      |  |             |  | -     |                 |  |  | -                   |  |  |         | -     
|2021 and thereafter |  |          | -      |  |             |  | -     |                 |  |  | -                   |  |  |         | -     
|Total               |  |          | 25,936 |  |             |  | 9,700 |                 |  |  | 9,592               |  |  |         | 17,435



The contractual
annual loan principal payments per bank loan to be made subsequent to December 31, 2015 were as follows:



|                    |  | (a) |        |  | (b)         |  |        | (c)         |  |  | (d)             |  |  |         |       
|------------------- |  | --- | ------ |  | ----------- |  | ------ | ----------- |  |  | --------------- |  |  | ------- | ------
|                    |  | HSH |        |  | Commerzbank |  |        | DVB         |  |  | Firment Trading |  |  | Total   |       
|December 31         |  |     |        |  |             |  |        | Tranche (A) |  |  | Tranche (B)     |  |  | Limited |       
|2016                |  |     | 2,774  |  |             |  | 2,000  |             |  |  | 1,760           |  |  |         | 1,665 
|2017                |  |     | 2,774  |  |             |  | 13,650 |             |  |  | 1,760           |  |  |         | 1,665 
|2018                |  |     | 2,774  |  |             |  | -      |             |  |  | 7,060           |  |  |         | 1,665 
|2019                |  |     | 19,002 |  |             |  | -      |             |  |  | -               |  |  |         | 5,429 
|2020 and thereafter |  |     | -      |  |             |  | -      |             |  |  | -               |  |  |         | -     
|Total               |  |     | 27,324 |  |             |  | 15,650 |             |  |  | 10,580          |  |  |         | 10,424



The weighted average interest rate for the years
ended December 31, 2016 and 2015 was 3.52% and 3.05%, respectively.



F-28







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 13 | Share Based Payment
| | -- | -------------------



Share based payment comprise the following:



|Year 2016                       |  | Number of common
shares |        |  | Number of preferred
shares |  |   | Share
premium |  |  | Retained
earnings | 
|------------------------------- |  | ----------------------- | ------ |  | -------------------------- |  | - | ------------- |  |  | ----------------- | 
|                                |  |                         |        |  |                            |  |   |               |  |  |                   | 
|Non-executive directors payment |  |                         | 47,897 |  |                            |  | - |               |  |  | 50                | 
|Balance at December 31, 2016    |  |                         | 47,897 |  |                            |  | - |               |  |  | 50                | 



|Year 2015                       |  | Number of common
shares |        |  | Number of preferred
shares |  |   | Share
premium |  |  | Retained
earnings | 
|------------------------------- |  | ----------------------- | ------ |  | -------------------------- |  | - | ------------- |  |  | ----------------- | 
|                                |  |                         |        |  |                            |  |   |               |  |  |                   | 
|Non-executive directors payment |  |                         | 18,372 |  |                            |  | - |               |  |  | 60                | 
|Balance at December 31, 2015    |  |                         | 18,372 |  |                            |  | - |               |  |  | 60                | 



|Year 2014                       |  | Number of common
shares |       |  | Number of preferred
shares |  |   | Share
premium |  |  | Retained
earnings | 
|------------------------------- |  | ----------------------- | ----- |  | -------------------------- |  | - | ------------- |  |  | ----------------- | 
|                                |  |                         |       |  |                            |  |   |               |  |  |                   | 
|Non-executive directors payment |  |                         | 4,577 |  |                            |  | - |               |  |  | 60                | 
|Balance at December 31, 2015    |  |                         | 4,577 |  |                            |  | - |               |  |  | 60                | 



For the
year ended December 31, 2016:



Non-executive director’s
payments:

Refers to the common shares
issued or accrued during the year to our non-executive directors pursuant to their letters of appointment.



Series A Preferred shares:

Upon former Chief Executive
Officer’s resignation in July 2016 the 2,567 series A preferred shares, granted to him on April 20, 2012, were redeemed.
As of December 31, 2016 there were no series A preferred shares outstanding.



For
the year ended December 31, 2015:



Non-executive director’s
payments:

Refers to the common shares
issued or accrued during the year to our non-executive directors pursuant to their letters of appointment.



For
the year ended December 31, 2014:



Non-executive director’s
payments:

Refers to the common shares
issued or accrued during the year to our non-executive directors pursuant to their letters of appointment.



| | 14 | Voyage Expenses and Vessel Operating Expenses
| | -- | ---------------------------------------------



Voyage expenses and vessel operating
expenses in the consolidated statement of comprehensive loss/income consisted of the following:



Voyage expenses consisted
of:



|                      |  | For the year ended December 31, |      
|--------------------- |  | ------------------------------- | -----
|                      |  | 2016                            |      
|Commissions           |  |                                 | 468  
|Bunkers expenses      |  |                                 | 593  
|Other voyage expenses |  |                                 | 210  
|Total                 |  |                                 | 1,271



F-29







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 14 | Voyage Expenses and Vessel Operating Expenses (continued)
| | -- | ---------------------------------------------------------



Vessel operating expenses
consisted of:



|                                |  | For the year ended December 31, |      
|------------------------------- |  | ------------------------------- | -----
|                                |  | 2016                            |      
|Crew wages and related costs    |  |                                 | 4,829
|Insurance                       |  |                                 | 798  
|Spares, repairs and maintenance |  |                                 | 1,699
|Lubricants                      |  |                                 | 462  
|Stores                          |  |                                 | 633  
|Other                           |  |                                 | 267  
|Total                           |  |                                 | 8,688



| | 15 | Administrative Expenses
| | -- | -----------------------



The amount shown in the consolidated
statement of comprehensive loss/income is analysed as follows:



|                                |  | For the year ended December 31, |      
|------------------------------- |  | ------------------------------- | -----
|                                |  | 2016                            |      
|Personnel expenses              |  |                                 | 1,040
|Audit fees                      |  |                                 | 111  
|Travelling expenses             |  |                                 | 4    
|Consulting fees                 |  |                                 | 28   
|Communication                   |  |                                 | 19   
|Stationery                      |  |                                 | 2    
|Greek authorities tax (note 20) |  |                                 | 264  
|Other                           |  |                                 | 626  
|Total                           |  |                                 | 2,094



| | 16 | Interest Expense and Finance Costs
| | -- | ----------------------------------



The amounts in the
consolidated statement of comprehensive loss/income are analysed as follows:



|                                         |  | For the year ended December 31, |      
|---------------------------------------- |  | ------------------------------- | -----
|                                         |  | 2016                            |      
|Interest payable on long-term borrowings |  |                                 | 2,430
|Bank charges                             |  |                                 | 33   
|Amortization of debt discount            |  |                                 | 128  
|Other finance expenses                   |  |                                 | 85   
|Total                                    |  |                                 | 2,676



F-30







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 17 | Dividends
| | -- | ---------



Dividends
declared and paid during the years ended December 31, 2016, 2015 and 2014 are as follows:



No
dividends declared or paid on common shares during the year ended December 31, 2016. No dividends declared or paid on the Company’s
Series A Preferred shares during the year ended December 31, 2016 as well. On July, 2016 the remaining 2,567 Series A Preferred
shares were redeemed and as of December 31, 2016 there were no Series A Preferred shares outstanding.



No
dividends declared or paid on common shares during the year ended December 31, 2015. Dividends declared and paid on the Company’s
Series A Preferred shares during the year ended December 31, 2015 are as follows:



|2015                   |  | $ per share |       |  | $000’s |  |     | Date declared |  | Date Paid        
|---------------------- |  | ----------- | ----- |  | ------ |  | --- | ------------- |  | -----------------
|1st Preferred dividend |  |             | 77.26 |  |        |  | 198 |               |  | February 18, 2015
|2nd Preferred dividend |  |             | 97.39 |  |        |  | 250 |               |  | December 21, 2015
|                       |  |             |       |  |        |  | 448 |               |  |                  



* Settled with several payments, which final payment
was made in January 2016.



|2014                   |  | $ per share |       |  | $000’s |  |     | Date declared |  | Date Paid        
|---------------------- |  | ----------- | ----- |  | ------ |  | --- | ------------- |  | -----------------
|1st Preferred dividend |  |             | 86.54 |  |        |  | 223 |               |  | May 9, 2014      
|2nd Preferred dividend |  |             | 27.34 |  |        |  | 70  |               |  | December 30, 2014
|                       |  |             |       |  |        |  | 293 |               |  |                  



| | 18 | Contingencies
| | -- | -------------



Various claims, suits and
complaints, including those involving government regulations, arise in the ordinary course of the shipping business. In addition,
losses may arise from disputes with charterers, environmental claims, agents, and insurers and from claims with suppliers relating
to the operations of the Company’s vessels. Currently, management is not aware of any such claims or contingent liabilities,
which are material for disclosure.



| | 19 | Commitments
| | -- | -----------



The Company enters into time
charter and bareboat charter arrangements on its vessels. These non-cancellable arrangements had remaining terms between eleven
days to four months as of December 31, 2016 and between two days to two months as of December 31, 2015, assuming redelivery at
the earliest possible date. Future net minimum lease revenues receivable under non-cancellable operating leases as of December
31, 2016 and 2015, are as follows (vessel off-hires and dry-docking days that could occur but are not currently known are not
taken into consideration; in addition early delivery of the vessels by the charterers is not accounted for):



|                |  | 2016 |       |  | 2015 | 
|--------------- |  | ---- | ----- |  | ---- | 
|Within one year |  |      | 1,086 |  |      | 
|Total           |  |      | 1,086 |  |      | 



These amounts
include consideration for other elements of the arrangement apart from the right to use the vessel such as maintenance and crewing
and its related costs.



At December
31, 2016 and 2015, the Company was a party to an operating lease agreement as lessee (note 4). The operating lease relates to
the office premises of the Manager and expired in August 2015 but was silently extended until December 31, 2015. In 2016 the Company
renewed the lease agreement at a monthly rate of €10.36 and for a lease period ending January 2, 2025, but otherwise on substantially
similar terms.



F-31







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 19 | Commitments (continued)
| | -- | -----------------------



The future
minimum lease payments under this agreement as of December 31, 2016 and 2015 assuming a Euro: US dollar exchange rate for 2016:
1:1.05, were as follows:



|                                            |  | 2016 |       |  | 2015 | 
|------------------------------------------- |  | ---- | ----- |  | ---- | 
|Within one year                             |  |      | 131   |  |      | 
|After one year but not more than five years |  |      | 522   |  |      | 
|More than five years                        |  |      | 392   |  |      | 
|Total                                       |  |      | 1,045 |  |      | 



Total rent
expense under operating leases for the years ended December 31, 2016 and 2015, amounted to $138 and $195, respectively.



| | 20 | Income Tax
| | -- | ----------



Under the laws of the countries
of the vessel owning companies’ incorporation and / or vessels’ registration, vessel owning companies are not subject
to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in vessel
operating expenses in the accompanying consolidated statements of loss.



Greek Authorities Tax



In January 2013, a new tax
law 4110/2013 amended the long-standing provisions of art. 26 of law 27/1975 by imposing a fixed annual tonnage tax on vessels
flying a foreign (i.e., non-Greek) flag which are managed by a Law 89 company, establishing an identical tonnage tax regime as
the one already in force for vessels flying the Greek flag. This tax varies depending on the size of the vessel, calculated in
gross registered tonnage, as well as on the age of each vessel. Payment of this tonnage tax completely satisfies all income tax
obligations of both the shipowning company and of all its shareholders up to the ultimate beneficial owners. Any tax payable to
the state of the flag of each vessel as a result of its registration with a foreign flag registry (including the Marshall Islands)
is subtracted from the amount of tonnage tax due to the Greek tax authorities. As of December 31, 2016 and 2015 the tax expense
under the law amounted to $264 and $256 respectively and is included in administrative expenses in the consolidated statement
of comprehensive loss/income.



U.S. Federal
Income Tax



Globus is a foreign corporation
with wholly owned subsidiaries that are foreign corporations, which derive income from the international operation of a ship or
ships from United States (“U.S”) source shipping income for U.S. federal income tax purposes.



Globus believes that to the
best of its knowledge, under § 883 of the Internal Revenue Code, its income and the income of its ship-owning subsidiaries,
to the extent derived from the international operation of a ship or ships, are currently exempt from U.S. federal income tax.



The following is a summary,
discussing the application of the U.S. federal income tax laws to the Company relating to income derived from the international
operation of a ship or ships. The discussion and its conclusion is based upon existing U.S. federal income tax law, including
the Internal Revenue Code (the “Code”) and final U.S. Treasury Regulations (the “Regs”) as currently in
effect, all of which are subject to change, possibly with retroactive effect.



Application of § 883
of the Code for the year ended December 31, 2016



In general, under § 883,
certain non-U.S. corporations are not subject to U.S. federal income tax on their U.S. source income derived from the international
operation of a ship or ships.



F-32







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 20 | Income Tax (continued)
| | -- | ----------------------



For this purpose, U.S. source
gross transportation income includes 50% of the shipping income that is attributable to transportation that begins or ends (but
that does not both begin and end) in the United States.



Shipping income attributable
to transportation exclusively between non-U.S. ports is generally not subject to any U.S. Federal income tax.



“Shipping
income” means income that is derived from:



(a) the use of vessels;

(b) the hiring or leasing of vessels
for use on a time, operating or bareboat charter basis;

(c) the participation in a pool,
partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates
in that generates such income; or

(d) the performance of services
directly related to those uses.



Effective for any tax year
ending on September 25, 2004 and thereafter, the Regs provide that a foreign corporation will qualify for the benefits of §
883 if, in relevant part, the foreign country in which the foreign corporation is organized grants an equivalent exemption to
corporations organized in the U.S. and the foreign corporation meets the qualified shareholder test described below



A foreign corporation having
more than 50 percent of the value of its outstanding shares owned, directly or indirectly by application of specific attribution
rules, for at least half of the number of days in the foreign corporation's taxable year by one or more qualified shareholders
will meet the qualified shareholder test. In part, an individual who is a shareholder will be considered a qualified shareholder
if they are a resident of a qualified foreign country and do not own their interest in the foreign corporation through bearer
shares (except for bearer shares held in a dematerialized or immobilized book entry system), either directly or indirectly by
application of the attribution rules.



For the year ended December
31, 2016, Globus and its wholly owned subsidiaries deriving income from the operation of international ships are organized in
foreign countries that grant equivalent exemptions to corporations organized in the U.S. Globus and its relevant subsidiaries
have more than 50% of the value of their stock for at least half of the number days of their taxable year indirectly owned in
the form of registered shares by one individual residing in a qualified foreign country. Accordingly, all of Globus’ and
its ship-owning or operating subsidiaries that rely on § 883 for exempting U.S. source income from the international operation
of ships would not be subject to U.S. federal income tax for the year ended December 31, 2016. Globus anticipates it and its relevant
subsidiaries income will continue to be exempt in the future from U.S. federal income tax. However, in the future, Globus or its
subsidiaries may not continue to satisfy certain criteria in the U.S. tax laws and as such, may become subject to the U.S. federal
income tax on future U.S. source shipping income. For the year ended December 31, 2016 the Company had no US Source Gross Transportation
Income.



| | 21 | Financial risk management objectives and policies
| | -- | -------------------------------------------------



The Company’s
financial liabilities are bank loans, trade and other payables. The main purpose of these financial liabilities is to assist in
the financing of Company’s operations and the acquisition of vessels. The Company has various financial assets such as trade
receivables and cash and short-term deposits, which arise directly from its operations. The main risks arising from the Company’s
financial instruments are cash flow interest rate risk, credit risk, liquidity risk and foreign currency risk.



Interest
rate risk



Interest
rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
long-term debt obligations with floating interest rates. To manage this, the Company usually enters into interest rate swaps,
in which the Company agrees to exchange, at specific intervals, the difference between fixed and variable interest rate. Interest
amounts are calculated by reference to an agreed upon notional principal amount. As of December 31, 2016 and 2015 the Company
had no interest rate swap agreements in place. As of December 31, 2016 and 2015, 31% and 19% of the Company’s bank borrowings
were at a fixed rate of interest.



F-33







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 21 | Financial risk management objectives and policies
(continued)
| | -- | -------------------------------------------------------------



Interest
rate risk table



The following
table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant,
of the Company’s profit. There is no impact on the Company’s equity.





|        |  | Increase/Decrease in basis
points |     |  | Effect on profit | 
|------- |  | --------------------------------- | --- |  | ---------------- | 
|        |  |                                   |     |  |                  | 
|2016    |  |                                   |     |  |                  | 
|$ Libor |  |                                   | +15 |  |                  | 
|        |  |                                   | -20 |  |                  | 
|2015    |  |                                   |     |  |                  | 
|$ Libor |  |                                   | +15 |  |                  | 
|        |  |                                   | -20 |  |                  | 





Foreign
currency risk



The following table demonstrates
the sensitivity to a reasonably possible change in the Euro exchange rate, with all other variables held constant, to the Company’s
profit due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes
for all other currencies as of December 31, 2016 and 2015 was not material.



|     |  | Change in rate |      |   | Effect on profit | 
|---- |  | -------------- | ---- | - | ---------------- | 
|     |  |                |      |   |                  | 
|2016 |  |                | +10% |   |                  | 
|     |  |                | -10  | % |                  | 
|     |  |                |      |   |                  | 
|2015 |  |                | +10% |   |                  | 
|     |  |                | -10  | % |                  | 



Credit
risk



The Company
operates only with recognised, creditworthy third parties including major charterers, commodity traders and government owned entities.
Receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to impairment on trade
receivable is not significant. The maximum exposure is the carrying value of trade receivable as indicated in the consolidated
statement of financial position. With respect to the credit risk arising from other financial assets of the Company such as cash
and cash equivalents, the Company’s exposure to credit risk arises from default of the counter parties, which are recognised
financial institutions. The Company performs annual evaluations of the relative credit standing of these counter parties. The
exposure of these financial instruments is equal to their carrying amount as indicated in the consolidated statement of financial
position.



| |  | Concentration of credit risk table:
| |  | -----------------------------------



The following
table provides information with respect to charterers who individually, accounted for approximately more than 10% of the Company’s
revenue for the years ended December 31, 2016, 2015 and 2014:



|      |  | 2016 |       |  | % |  |     | 2015 |  |  | %      |  |  | 2014 |     |   | % | 
|----- |  | ---- | ----- |  | - |  | --- | ---- |  |  | ------ |  |  | ---- | --- | - | - | 
|A     |  |      | -     |  |   |  | -   |      |  |  | 82     |  |  |      | 1   | % |   | 
|B     |  |      | -     |  |   |  | -   |      |  |  | 316    |  |  |      | 2   | % |   | 
|C     |  |      | 1,052 |  |   |  | 12  | %    |  |  | 586    |  |  |      | 5   | % |   | 
|D     |  |      | 925   |  |   |  | 11  | %    |  |  | 934    |  |  |      | 7   | % |   | 
|Other |  |      | 6,763 |  |   |  | 77  | %    |  |  | 11,195 |  |  |      | 88  | % |   | 
|Total |  |      | 8,740 |  |   |  | 100 | %    |  |  | 12,715 |  |  |      | 100 | % |   | 



F-34







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 21 | Financial risk management objectives and policies
(continued)
| | -- | -------------------------------------------------------------



Liquidity
risk



The Company
mitigates liquidity risk by managing cash generated by its operations, applying cash collection targets appropriately. The vessels
are normally chartered under time-charter, bareboat and spot agreements where, as per the industry practice, the charterer pays
for the transportation service 15 days in advance, supporting the management of cash generation. Vessel acquisitions are carefully
controlled, with authorisation limits operating up to board level and cash payback periods applied as part of the investment appraisal
process. In this way, the Company maintains a good credit rating to facilitate fund raising. In its funding strategy, the Company’s
objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. Excess cash used
in managing liquidity is only invested in financial instruments exposed to insignificant risk of changes in market value or are
being placed on interest bearing deposits with maturities fixed usually for no more than 3 months. The Company monitors its risk
relating to the shortage of funds by considering the maturity of its financial liabilities and its projected cash flows from operations.



The table
below summarises the maturity profile of the Company’s financial liabilities at December 31, 2016 and 2015, based on contractual
undiscounted cash flows.



|Year ended December 31, 2016           |  | Less than 3 months |       |  | 3 to 12 months |  |        | 1 to 5 years |  |  | More than 5 years |  |  | Total |  
|-------------------------------------- |  | ------------------ | ----- |  | -------------- |  | ------ | ------------ |  |  | ----------------- |  |  | ----- | -
|Long-term debt                         |  |                    | 1,966 |  |                |  | 23,268 |              |  |  | 44,335            |  |  |       | -
|Accrued liabilities and other payables |  |                    | 2,609 |  |                |  | -      |              |  |  | -                 |  |  |       | -
|Trade payables                         |  |                    | 4,757 |  |                |  | -      |              |  |  | -                 |  |  |       | -
|Total                                  |  |                    | 9,332 |  |                |  | 23,268 |              |  |  | 46,966            |  |  |       | -



|Year ended December 31, 2015           |  | Less than 3 months |       |  | 3 to 12 months |  |       | 1 to 5 years |  |  | More than 5 years |  |  | Total |  
|-------------------------------------- |  | ------------------ | ----- |  | -------------- |  | ----- | ------------ |  |  | ----------------- |  |  | ----- | -
|Long-term debt                         |  |                    | 2,731 |  |                |  | 8,115 |              |  |  | 73,687            |  |  |       | -
|Accrued liabilities and other payables |  |                    | 1,802 |  |                |  | -     |              |  |  | -                 |  |  |       | -
|Trade payables                         |  |                    | 4,011 |  |                |  | -     |              |  |  | -                 |  |  |       | -
|Total                                  |  |                    | 8,544 |  |                |  | 8,115 |              |  |  | 73,687            |  |  |       | -



Capital
management



The primary
objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments
to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares as well as managing the outstanding level of debt.
Lenders may impose capital structure or solvency ratios, refer to note 12. No changes were made in the objectives, policies or
processes during the years ended December 31, 2016 and 2015. The Company monitors capital using the ratio of net debt to book
capitalisation adjusted for the market value of the Company’s vessels plus net debt.



The Company
includes within net debt, interest bearing loans gross of unamortized debt discount, less cash.



F-35







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 21 | Financial risk management objectives and policies
(continued)
| | -- | -------------------------------------------------------------



Adjusted book
capitalization refers to total equity adjusted for the market value of the Company’s vessels. The Company’s policy
is to keep the ratio described above between a range of 60% - 80%.



|                                                          |  | December 31, |        
|--------------------------------------------------------- |  | ------------ | -------
|                                                          |  | 2016         |        
|Interest bearing loans                                    |  |              | 65,778 
|Cash (including restricted cash)                          |  |              | (373   
|Net debt                                                  |  |              | 65,405 
|                                                          |  |              |        
|Equity                                                    |  |              | 20,760 
|Adjustment for the market value of vessels (charter-free) |  |              | (46,292
|Adjusted book capitalization                              |  |              | (25,532
|                                                          |  |              |        
|Adjusted book capitalization plus net debt                |  |              | 39,873 
|Ratio                                                     |  |              | 164    



The deterioration
in the ratio of net debt to adjusted capitalization plus net debt, resulted due to the prevailing adverse conditions in the shipping
market. The Company’s objective is to return to the range of 60%- 80%. Net debt as calculated above is not consistent with
the International Financial Reporting Standards (“IFRS”) definition of debt. The following reconciliation is provided:



|                                                            |  | December 31, |       
|----------------------------------------------------------- |  | ------------ | ------
|                                                            |  | 2016         |       
|Debt in accordance with IFRS (long & short-term borrowings) |  |              | 65,572
|Add: Unamortized debt discount                              |  |              | 206   
|                                                            |  |              | 65,778
|Less: Cash and bank balances and bank deposits              |  |              | 373   
|Net debt                                                    |  |              | 65,405



| | 22 | Fair values
| | -- | -----------



The carrying
values of financial instruments such as cash and cash equivalents, restricted cash, trade receivables and trade payables are reasonable
estimates of their fair value due to the short term nature of these financial instruments. The fair values of the credit and loan
facilities as of December 31, 2016 and 2015 was $62,831 and 70,609 respectively while their carrying value measured at amortised
cost as of December 31, 2016 and 2015 was $65,572 and $78,245 respectively.



Fair value measurement



The following
table provides the fair value measurement hierarchy (as defined in note 2.29) of the Company’s liabilities



As at December
31, 2016 and 2015, the Company held the following liabilities measured at or disclose their fair value:





|                                                |  | December 31, 2016 |        |  | Level 1 |  |   | Level 2 |  |  | Level 3 | 
|----------------------------------------------- |  | ----------------- | ------ |  | ------- |  | - | ------- |  |  | ------- | 
|                                                |  |                   |        |  |         |  |   |         |  |  |         | 
|Liabilities for which fair values are disclosed |  |                   |        |  |         |  |   |         |  |  |         | 
|Long term borrowings                            |  |                   | 62,831 |  |         |  | - |         |  |  | 62,831  | 



|                                                |  | December 31, 2015 |        |  | Level 1 |  |   | Level 2 |  |  | Level 3 | 
|----------------------------------------------- |  | ----------------- | ------ |  | ------- |  | - | ------- |  |  | ------- | 
|                                                |  |                   |        |  |         |  |   |         |  |  |         | 
|Liabilities for which fair values are disclosed |  |                   |        |  |         |  |   |         |  |  |         | 
|Long term borrowings                            |  |                   | 70,609 |  |         |  | - |         |  |  | 70,609  | 





There have
been no transfers between Level 1 and Level 2 during the years



F-36







GLOBUS MARITIME LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(Amounts presented in thousands of U.S. Dollars- except
for share and per share data, unless otherwise stated)



| | 23 | Events after the reporting
                                         date
| | -- | ------------------------------------------------------------------------



Amended
agreements with the banks



In March
2017 the Company agreed the main terms for the restructure of its loan agreements with HSH Nordbank AG and DVB Bank SE (see Note
12).



Share
and warrant purchase agreement



On February
8, 2017, the Company entered into a Share and Warrant Purchase Agreement pursuant to which it sold for $5 million an aggregate
of 5 million of its common shares, par value $0.004 per share and warrants to purchase 25 million of its common shares at a price
of $1.60 per share to a number of investors in a private placement. These securities were issued in transactions exempt from registration
under the Securities Act. The following day, the Company entered into a registration rights agreement with those purchasers providing
them with certain rights relating to registration under the Securities Act of the Shares and the common shares underlying the
Warrants.



In connection
with the closing of the February 2017 private placement, the Company also entered into two loan amendment agreements with existing
lenders.



One loan
amendment agreement was entered into by the Company with Firment Trading Limited, an affiliate of the Company’s chairman,
and the lender of the Firment Credit Facility, which then had an outstanding principal amount of $18,524. Firment released an
amount equal to $16,885 (but left an amount equal to $1,639 outstanding, which continued to accrue under the Firment Credit Facility
as though it were principal) of the Firment Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Firment,
16,885,000 common shares and a warrant to purchase 6,230,580 common shares at a price of $1.60 per share. Subsequent to the closing
of the February 2017 private placement, Globus repaid the outstanding amount on the Firment Credit Facility in its entirety.



The other
loan amendment agreement was entered into by the Company with Silaner Investments Limited, an affiliate of the Company’s
chairman, and the lender of the Silaner Credit Facility. Silaner released an amount equal to the outstanding principal of $3,115
(but left an amount equal to $74 outstanding, which continued to accrue under the Silaner Credit Facility as though it were principal)
of the Silaner Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares
and a warrant to purchase 1,149,437 common shares at a price of $1.60 per share. Subsequent to the closing of the February 2017
private placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety.



Each of
the above mentioned warrants are exercisable for 24 months after their respective issuance. Under the terms of the warrants, all
warrant holders (other than Firment Shipping Inc., which has no such restriction in its warrants) may not exercise their warrants
to the extent such exercise would cause such warrant holder, together with its affiliates and attribution parties, to beneficially
own a number of common shares which would exceed 4.99% (which may be increased, but not to exceed 9.99%) of the Company’s
then outstanding common shares immediately following such exercise, excluding for purposes of such determination common shares
issuable upon exercise of the warrants which have not been exercised. This provision does not limit a warrant holder from acquiring
up to 4.99% of the Company’s common shares, selling all of their common shares, and re-acquiring up to 4.99% of the Company’s
common shares.



F-37